Jericho79

Personally, I take great delight in people refusing to accept there will be a crash at some point.

You must acknowledge that if prices continue to increase at a faster rate than salaries, that eventually, property will become too expensive for the working/middle classes.

All it would take right now, IMO, is for interest rates to rise to 3-5%, and most people in Vancouver (ie. people living/working there with a mortgage) would be f***ed.

JamesM

That's one of the definitive symptoms of any boom. The belief that a market can't crash despite the fact that every market in human history crashes. It's economic evolution.

MikeUK

Every market will crash at some point

What makes property so interesting is how far the banks and government will go to prop it up

and with some governments pushing property out of the lower classes and into desirable rentals doesn't seem to be too big an issue

that in some part is why transit is built, keep prices high keep the riff raff out and ship in your plebs on demand

Jericho79

Given that a small increase in interest rates would seriously effect anyone who purchased property in the last 5 years, there's probably not a lot that the banks/canadian government can do. Canada (more specifically, BC) isnt big/influential enough to keep interest rates low if everyone else is increasing them.

jerry brewer

Hi
basically availability of work was why it was initially Vancouver
then the kids settled into school so well, couldn't move them again after moving them half way around the world.
So it is here for a while to build up the pension, ( i have to do at least 10yrs with my employer ) then who knows where for retirement
cheers
jerry

el_richo

And those who will be *****ed the most will be the young folk who bought more recently at close to 100% mortgage, or the close to retirees who're hoping to use their equity to pay for their retirement.

A rise in rates of 1% will screw many, and 3% rise will screw most.

jerry brewer

Hi
So by that theory is the london market ready for a crash, my visit the other year it was 1 mill gbp for a terraced house.
here less than half that gets a detached property.
I think any interest rate will just slow the local economy, it seems here people will stop spending and pay the mortgage
i talked with one guy once about historical high rates, he said you paid the mortgage, then figured out what you had left for food, sometimes there was little, and only neccessity were bought
i have seen the ups and downs since the 70's in uk
only thing that gains value is land, it will only get more demand as the world gets busier
cheers
jerry

jerry brewer

Hi
i imagine for most retirees a crash wouldnt hurt to much, you sell for less, downsize to a property which is then cheaper because of any crash and pay less tax on the move
the young folk would have time to sit on the property until it climbs back up.
cheers
jerry

el_richo

Why compare property prices in Vancouver to London? Surely we should compare Vancouver to Portland, for example?

el_richo

Your more expensive property will drop in value much more than the cheaper downsized option in $'s and possibly %'s. With more reports of old folks or pre retirees worried about sustainable income, it would be a kick in the teeth (if they have any left).

The young ones can of course ride it out (unless their 1 bed apartment becomes too small due to pregnancies, or marriage, or divorce, or job loss forces a sale, etc) although like in the states you may have to wait 10 years for prices to return unless you want to sell at an impressive loss and a drain on your future retirement income.

It's scary how indebted and blinkered people are here.

jerry brewer

Hi
Best to agree to disagree,

each to their own opinion

time will tell who is right

as always
cheers
jerry

MikeUK

If we care to look at the process available now ?

But in many cases if this is large enough, the banks/government will alter terms to enable people to keep there house rather than default

Its in neither parties interest to have the market crash... rather they'd look to engineer a slow (just affordable) correction

I suspect many will offer the opportunity to extend the terms either in years, or allow the debt to rise... worst

the premise is to pay it off later.....

el_richo

Genuine question. Has any government in a country experiencing a popped housing bubble done any of that?

Even a slow correction or flatline will mess a lot of people up who have the real estate retirement strategy (majority of canadian home owners?).

el_richo

It's not about being right or wrong. It's about risk, and the fact people see no risk in having all your eggs in one highly indebted basket in todays Vancouver real estate market.

Vancouver is not different than anywhere else in regards to real estate bubbles and their outcomes. Maybe i'm just the different one.

Jericho79

If I'd recently bought property in Vancouver, I would prefer to have my head in the sand too
The risk is too big to think about.