$1 million? Not quite, but a modest east side bungalow like this is still way of the price range of myself and many other potential first time buyers.
This game, which I discovered from this fascinating Bloomberg article, is silly and deliberately off in terms of the pricing for its “mansions.” But it make a sobering prove a point.
The point is that young people – my generation of first time HOME buyers (this does not refer to condos) – have only one feeling when thinking about purchasing a home in the city of which I was born (yes, one of the few): hopelessness.
So professionals like Robert Hogue, a senior economist at RBC Royal Bank, say that “The type of price increases that we’ve seen in Vancouver are unlikely to be sustained. There might be some downside risk to that market.”
OK. I suppose that should provide some kind of hope…right?
Wrong.
I am much more inclined to believe to viewpoint like this:
“Cameron Muir, chief economist for the British Columbia Real Estate Assn., argues for Vancouver’s special situation, as do many in the trade. “Vancouver has had the highest prices in Canada for some time,” says Muir. “The geography is constrained. You’ve got the Pacific on the West, the mountains to the north, the U.S. border to the south, and land reserves to the east. That puts tremendous upward pressure on land prices. We also have solid population growth with a sizeable proportion of immigrants.” Vancouver is a city of just over 2 million, and Muir expects 40,000 immigrants this year. On top of that, says Muir, there are “high-net-worth Asian purchasers buying as investments, as second homes, or for satellite families.”
Therein lies the sense of pessimism that I and my wife have about living in Vancouver in the foreseeable future.
Grant Connell, the former Canadian tennis great and now a top realtor in the city, see things merely “stalling.”
The problem for someone in my position is that if this is the case, pricing will stall far above the threshold of what would be a reasonable mortgage to be able to take on.
There is a generation of young people in this city that are aiming for house in the following ways:
- Starting small in a condo, and flipping properties a few of times to save up enough capital to make a real dent in a mortgage for a house
- Inherit a residence from their parents or grandparents
- Buying outside of the city in suburbs like Surrey or Langley
I know that in my situation, number 3 is the way to go, as you can still get a house with a decent sized lot for $450,000-$500,000 in Surrey. I know…anywhere else in the country and they are horrified with kind of pricing. Here in Metro Vancouver, however, it is a tangible bargain.
Regardless of any notion of housing boom and busts within Canada (and I am aware that housing is hot in every corner of the country these days), Vancouver is like an island that is distanced from any of the normal fluctuations the rest of the country experiences.
The beauty, the lifestyle, the fact that land is squeezed and at a premium because of “the Pacific on the West, the mountains to the north, the U.S. border to the south, and land reserves to the east,” is going to make this city always in demand.
Yes, I read the article, and watched this video, which I suppose should instill some kind of confidence that things will eventually even out and once again become “affordable.”
But at this point in the city’s history, I am having a very hard time picturing when exactly (if ever) I will be able to raise my arms and enjoy the ride down.
