not2old

do you see yourself as a property owner ever?

Based on what is known today - do you believe its better to rent than to own a single family residential property that only you & your family live in?

It is my strong belief & opinion that owning a single family property that one lives in with their spouse/partner, child & maybe the grans , is for family life, my own back yard, my castle, no landlord and knowing for the most part that my 25 year mortgage payments are approx X (give or take a few bucks in payments based on interest rates). That 10, 15, 25 years from now when the kids have left & gone their own way, that as that home owner we could choose to downsize, even remain in the same place, or sell the house & move into a rental.

At no time have I/we as owners of a single family property that only we live in, ever considered that our place would increase in price.... ever. Of course the past 40 odd years has proven different. Past history, values & increases cannot be guaranteed the same results in the future.

As for our 'Investment properties' mostly the same way at the outset, they were purchased for cash flow only, we never factor in a price increase or fix & flip just for profit, yet we got those results.

The Canadian dream you'd want to believe is to max on RRSP'S, TFSA, be mortgage free, have a great job, never be unemployed, never get a sickness or disability, have a company pension & retire early... what a dream that can only be achieved by a few (so one would believe that)

Buying a home that you live in is not cheap - its expensive, even if the rent you're paying equals the mortgage payments. The added costs of ownership includes property tax, maintenance & repair, some extra utilities, things that have to be replaced such as roof, furnace, washer, dryer, dishwasher - yet, hopefully 10, 15 years down the road you may have some equity in the place from the principal payments towards the mortgage, whereas the renter has nothing except maybe the same level of outlay as the person with a mortgage on a property

.

el_richo

I believe at this time in Vancouver, it's better for my family to rent rather than buy.

I recently sold property so i no longer own. Luckily the proceeds and some investments pay for my rent until we decide our next move.

The building we live in recently had some work done, dinging the owners with a special assessment of $12k each. Plus our dishwasher broke so the owner bought us a new one.

Even better than that, to own our place it would cost us around $1.8k per month more than we pay in rent.

Life is good!

To each their own. All i'm saying in all of this is that it's scary how people are financially stunted, yet are comfortable with sky high debt (risk) to own a property and/or run in fear from other investments.

Jericho79

None of this bears any relevance at all to the risk of a housing crash in Vancouver.

not2old

crystal ball gazing ....

when do you think it will happen?

after it happens, when do you think it will recover?


how can you stick your neck out & say that?

When do you take great delight knowing this?

When do you believe will be the right time to buy in Vancouver?

Jericho79

It's simple maths. Prices cannot continue to rise beyond the rate of wage inflation. It's impossible. I think the better question is why you think Vancouver is any different to any other housing market?

not2old

Vancouver isn't any different

That's why folks keep on buying houses, everywhere, anywhere with new developments keep on being built, people keep on buying & selling, some move up ladder, others downsize.

Signs everywhere, coming soon, new this that & the other developments, new condo's, resale properties, there never seems to not be properties for sale or buyers to scoop them up.

It never ends.... there isn't enough houses for the demand, or is there?

You've seen it in the media, folks waiting for a correction, or the we' should have bought last year, 5 years ago, even 10 years ago when prices were lower than they are today & look at all that dead rent money we paid to some greedy building owner

just saying ......

not2old

renting cost versus property prices the last while

page 8 in the following link for number of units & property prices in Vancouver

http://www.bcrea.bc.ca/docs/economic...ngforecast.pdf

Rental prices

Apartment Rental Rates in Vancouver British Columbia | RentBoard.ca

JamesM

The main arguments that people will give for the rising prices are a skewed view of demand and supply focusing on the following:

-Look how many immigrants we get. (Very few people actually know the answer to this or how much money they arrive with but it's a notion carried widely by Joe Public)

-You don't need first time buyers as people buy second properties.

-It's all owned by Chinese Investors (this one specific more so to Toronto)

-Everyone has to live Downtown as there is no transit

Very few people talk about the fact that interest rates are low and this has massively exaggerated affordability. The reason people don't talk about it is that those who responsible for constructing and selling the things have no interest in compromising any sale. Simply put there is too much to gain and nothing to lose for most educated people in the market.

The challenge comes when you start seeing empty rentals that is when the market will begin to slide. The other alarming figure is maintenance fees rising faster than inflation in the condo market.

Interest rates rising is the most obvious Bubble burster.

The fact of the matter is they are running out of ways to defy gravity. I suspect as interest rates rise they'll try and massage in longer term mortgages again.

The property market defies logic because it is sadly a rigged game/pyramid system.

el_richo

Interest paid to the bank is dead money. Property tax is dead money. Strata payment is dead money. Equity, in effect, is dead money. Realtor fees is dead money. Land tax is dead money.

just saying...

The main point is, at todays prices, buying property in Vancouver carries a high amount of risk that people don't just don't see. The gap between income and prices is too high. The price to rent ratio is too high. The cost to service debt will increase. Yet the emotional nature of property blinkers people.

Many of our friends look at us like we're crazy for selling our property and also investing in stocks, bonds, etc. They see that as a massive risk, yet they sit happily with an $800k mortgage on a recently purchased house with 5% down payment and renovations pending. They have minimal savings, large monthly expenses, and in a shrinking Canadian economy they still see no risk in what they do. They're typical of a vast number of people here.

Vancouverites are bonkers!

not2old

el_richo on post #39

should those numbers be correct, then I would wait & see what your friends accommodations are 5 years from now. There is no need to go at them telling them how nuts they are buying & having huge mortgages, property taxes, or any condo fees they may have etc

Maybe 5 years from now the Vancouver market may drop 25% or go up by 25% or more & continue climbing... its anyone's guess

Also, 5 years from now to see if you are still in the Vancouver area & still renting, or have bought

Good luck to you

Yorkiechef

Property should be somewhere that you live, all being well, after 25 years, you stop paying except for maintenance and the usual taxes. Had I not bought my property years ago, I would have paid rent to someone else and they would be very wealthy and I would be considerably poorer. When I needed to extend or improve my property I borrowed the money with further lending from the bank, in 10 years, my property has gone from £90k to £350k, I put down a reasonable deposit from a previous house, in that time I've spent £50k on improvements and £48k in repayments, I owe less than £36k on it. Most important of all it has been my home, something that everyone must have. Had I paid rent I would have paid over £100k. Bottom line is this, everyone must have a roof over their head if you are lucky you will have nothing to pay after 25 years then you down size to a new property suitable for your needs with little or no maint required. having a property is a risk, but in my opinion, not having one is a bigger risk.

jerry brewer

Hi
a couple of the old vancouver property crash threads
seems it is a popular subject
cheers
jerry

http://britishexpats.com/forum/canad...couver-644030/
http://britishexpats.com/forum/canad...oaster-684038/

not2old

and if you had bought at the wrong time when the prices just kept on going up [maybe at peak], then a recession hits, prices drop, negative equity, you lose your job - then the 25% down payment just went out the window. You now are on welfare living on benefits street

Not for everyone, nor do most folks hit the "lucky' jackpot

Yorkiechef

I agree with you to some extent, but when you buy a property, you buy what you can afford, if the value goes down is irrelevant, unless you divorce or have to move for work, otherwise your house is still paid for In 25 years and when you sell up, the house you buy which is smaller, will correspondingly be less to buy. No rent or mortgage repayment for the rest of your life.

Yorkiechef

If I were to move to Vancouver I would buy, no question, if...I could afford a property, I have been in and out of the property market due to work in overseas locations, when I have been out, it has bitten my arse, when I've been in, it has been a mixed bag, I admit I have recovered quite a bit in the last 10 years.