Hawk13

Heard on the radio (CBC program) that the average mortgage on a home in Vancouver is now double what you'd pay in rent, same size house, same location kinda thing.

Zen10

Gonna be bloody when they crash, that's for sure.

Boy d

maybe the case, but i doubt it's double but as with anywhere here, it depends where. The west side i can sure believe it, out in the valley less so.

here's a rough one:

one bed older apartment downtown .....250 k with a mortgage of about 1350 plus 100 bucks taxes and 200 a month condo fee for a total of:

1650

to rent the same unit

1000 - 1100 bucks

Boy d

yep, long over due though. Houses on the west side that were around 400 k 15 years ago are now up around 1.3 - 1.5 million. All the gains are based on debt and not income growth.

Personally i feel that it needs to happen and I'm a home owner! Although we got in when it wasn't so crazy and bought out of the city proper. Our mortgage is basically 2 years from being done anyway.

Even if prices drop to 2008 levels, a good 15 percent of equity will vanish. I think Canadian housing stock right now must be amongst the most unstable in the world.

Zen10

Same here - houses where we are have risen by 600% in 15 years. I am confident Australia can give you guys a run for your money when it comes to instability!

phat-dave

personally i tihnk youre both wrong, take the economics out of it and look at it politically... canada has its own mortgage insurance company.... do you think the government will sacrifice a drop in equity across the board that will potentially increase the likelihood of payouts to banks?

likewise in australia, politically the governments have a lot riding on the back of "property wealth" and the perceived "she be right, mate" mentality hence the continued stamp duty concessions and handouts to first home buyers.

both countries cannot sustain the property prices from an economic stand yet politically, they have to continue prop'ing up construction/property etc

ladylord

This bucks the trend. Bet the realtor is happy as is the senior.

http://www.nsnews.com/business/teard...207/story.html

Boy d

and how are they going to prop it up exactly? There are fewer buyers. Inventory is on the rise, stricter lending rules in place, rates likely to rise eventually. Add to that the fact that asian buyers are now looking at the US over Vancouver.

Boy d

one house does not a market make....there were only 66 sales yesterday for the whole of vancouver.

phat-dave

decline of real property prices are traditionally driven by true economic changes ie: mass job losses, just because demand has decreased, it doesn't necessarily imply a reduction of price in the supply.

how will they prop it up? good question ... but to start off they continue to leave rates low as the construction numbers don't indicate growth and inflation isn't an issue at present.

then they start to introduce alternative energy rebates like solar panel installations, recycled water or home renovation schemes to entice folks to reinvest within their existing property. they continue to fuel the economy with incentives for first home buyers such as a one off grant, stamp duty/tax savings and then as the domestic construction confidence slowly starts to increase you'll see the land developers whom have "land banked" for years start to offer home/land packages that include fancy fixtures and fittings and european kitchen appliances in lure buyers.

the above won't create a boom phase but it'll starve off a mass correction per se.

Londonuck

Know a lot of family/friends who got sucked in and bought in Dublin at the top end when everything seemed to be going up and up. Now all worth at least a third less just 3/4 years later. I dont think i'll ever buy.

Boy d

in this day and age, that's probably wise.

Hawk13

Put your money in gold and silver - better bet than a house and stocks these days

Boy d

silver over gold....dividend paying bank stocks too.

Hawk13

Agreed, but gold takes up less room and is a little more portable.