withabix

I suspect the opposite.

LTV ratios will be far higher in Vancouver and the nearest cities/suburbs and if investors get a cold, the prices could well fall faster there, where the value of the land is a higher proportion of the overall property value than the pile of Oriented Strand Board and 4x2 that is built on it, compared to further out of town.

A cookie cutter 5 bed SFH (excluding the land) has a build cost of about $250,000 no matter where it is. That house might sell for $500k in Abbotsford or $1.5million in Vancouver, but it still only cost $250k to build.

It depends on how many properties come to the market and what the view of the lenders is when it comes to renewing mortgages.

If you're in negative equity, a lender won't be too keen on the asset value...

vanity

This has been spoken about for 10 years. What is the factor that will cause it to stagnate at last?

Withabix, I have seen developers building ad nauseum. Are they making large profits? Do you know of any reputable names?

scrubbedexpat091

I have a suspicion a lot of the fly in/fly out workers from BC who work in Alberta will end up losing their homes as it's likely they bought the home most likely based on Alberta wages, and will be unlikely to find those kinds of wages in BC or really anywhere else.

But it's just a guess.

I find it silly to buy a house at 700,000 and basically be broke and in debt for 30 years and if your lucky you might be able to keep the place without losing it.

I go by if renting is cheaper, better off to rent, I don't see value in a house if it's going to cost me 3 times more per month then rent would.

Plus many don't seem to take into account the cost of maintenance on a house, we have a house next to our building with blue tarps on the roof, the couple who own it can't afford a new roof, but they own a house.

Mikeypm

Been looking at Coquitlam, poco and now extendwd the search to maple ridge

vanity

Is the market there competitive and what's the budget to get a good family home near transport?

BristolUK

Things change though and sometimes it might just be the other way round.

When I bought my house back in England, my mortgage payment made a big hole in my take home pay. Ten years on, my net pay was up at least two-thirds (just normal cost of living type rises), my mortgage was still the same and about half the cost of renting a bedsit.

Plus the other costs that don't come with renting - buildings insurance, water and property taxes. So even if you're mortgage free it's really not like free housing.

But if you can survive the short term problems, there are long term advantages.

ExKiwilass

well, of course you do, you're in abby

it's a demand thing. Demand for houses on the outskirts is already lower, hence they are cheaper now. If prices fall, they'll fall even more - it just makes sense as those who couldn't have afforded closer in will be able to and shorten their commutes. The other factor is that the closer in your home is, the easier it is to rent.

it's already happening in South surrey (prices have actually decreased there). too damn far away.

having said that, even if prices fall 50% in van west they are still going to be around $1million for a house - out of reach of most of us

ExKiwilass

who knows. I don't see it making much difference, but time will tell.

ExKiwilass

i hear coquitlam and poco are very competitive for single family homes - as it is still possible to get one there under 800k.

no idea about MR.

scrubbedexpat091

Squamish...lol?

If you need to be in downtown Vancouver, its quicker and nicer job then anywhere from the valley such as Maple Ridge, however we do lack certain amenities like a movie theater but you do have all the basics, and if you like outdoors stuff, lots to do within a 1 hour drive.

55 minutes generally to downtown.

scrubbedexpat091

I would certainly rather own vs renting, but it's not possible to own in BC for the most part if you don't have near or over a 6 figure income for the household, no way a couple making 35k is buying anything out here.

I am sure in tiny small remote towns housing is cheaper, but then you have the lack of jobs issue which makes the housing price moot since there is nowhere to work, and why housing is cheap in those regions.

Unless one has a huge huge down payment no bank is going to give a loan for a 400,000 house with income of 35k a year.

Our limit with 10% down is roughly 100,000 to 110,000 depending on who you ask (RBC said 110,000, the mortgage broker where GF works says 100,000)

Also need 700+ credit score, we are just shy of that. We don't have bad credit, but insufficient credit to make a difference in the score, but there is the issue of down payment as well, (and the complications saving is with disability involved) and the fact there is nothing in that price range for sale.

Even a town house is going to run you 200,000+ and then you have to deal with the strata BS and not sure I'd even wan't to live in a strata, they can be more restrictive then just renting, and then you have to pay 200-300+ a month in strata fees on top of the payment which makes them undesirable in my view.

withabix

That's not how this usually works and probably not how it will work here, in my opinion.

Have you lived in a country where the property bubble has burst? Lower priced areas are usually affected less.

The percentage falls hurt the higher-priced areas more, because of the usually higher LTV, loan-to-salary ratios and more rapidly disappearing equity.

(More) speculators will undoubtedly come in and mop up the 'fire sales' and repos in these areas, stabilising the reduced prices somewhat, like a dead cat bounce, but the people displaced from these properties move outwards, because they have to start again, with reduced equity.

Mortgage lenders start looking for lower LTV limits - maybe lending no more than 75-80% of a property's value, so that you, the buyer, take the equity risk and not the bank.

That means you have to buy a cheaper house out in the suburbs, so that your reduced equity will still get you that 5 bed cookie cutter.

R I C H

You don't think a landlord includes those overheads in his rental price? I certainly do.

ExKiwilass

that's assuming those that bought houses in van west have mortgages and of those that do, enough of them will be forced to sell en masse to trigger a price collapse. The thing is, a single family home in Vancouver has earning potential the way a condo doesn't or a house on the outskirts doesn't. You can rent rooms to foreign students, you can rent your basement, you can rent your upstairs for $$$ while you live downstairs..etc - lots of renters want to rent and the supply is very tight in vancouver. I'm not sure all of that is factored in when people talk about income and mortgage payments etc.

I also disagree it will be speculators moving in when prices drop - it'll be families who have been waiting for the crash. There are a LOT of people who want to buy closer in. Way more than want to live in the outer rings. I also think it very unlikely someone who loses their house in kits would buy further out - I think they'd be more likely to buy a condo or rent closer in - condos have been flat in price forevers and they could stay in their neighbourhood. Unlike some other cities, Vancouver has lots and lots of density closer to DT so to do this is possible. To live further out is a lifestyle choice as much as anything and not that appealing if you like urban.

Time will tell. I've lived in other Pac_rim cities and the demographic factors are very similar to Vancouver, with the same high property prices.

dbd33

I have. In the UK and in Canada (twice). It's a good time to trade up as the greater the value of the house the greater the proportionate fall in value. Alas, I never compared the impact of the bubble bursting on McMansions in far suburbs as opposed to the impact on quality urban housing stock because, well, it doesn't matter how little the house in the distant 'burb costs. It's still out there.