Re: Vancouver real estate now 9.3 times incomes
 

I agree. As much as I like it here, I wonder if it's really worth the price of RE. I wonder though, at what point does it stop being a bubble? It's been like this now for close to decade.

Re: Vancouver real estate now 9.3 times incomes
 

I wish I knew as I'm thinking about buying into this madness. I still think prices will fall, but only in real terms.

Re: Vancouver real estate now 9.3 times incomes
 

Alan, I'm kinda shocked you're taking the plunge. You've been such a bear for so long.

It's either a bubble or there's a transition going on from biggish provincial city to something bigger.

Either way it's bloody $$$.

Re: Vancouver real estate now 9.3 times incomes
 

me too, I doubt there will be a spectacular US style pop, more have a normal correction tied into interest rates. It's FTB with nothing down and over extended payments that need to be particularly cautious. If one can afford comfortably afford the payments and is it in for the long haul, the risk is significantly lower.

Re: Vancouver real estate now 9.3 times incomes
 

I think Vancouver's land use policies and height restrictions have lead to less inventory, more demand and inturn, higher prices.

Having been here as long as I have, I truly feel that Vancouver is at a point in its history where it will either tank big style or really take off. We need to start creating a city rather than just building one. As narcissistic as the place is, it sure grows on you and gets under your skin. I could easily transfer to Ottawa or elsewhere and be way better off, but I like it here:(

Re: Vancouver real estate now 9.3 times incomes
 

I'm still a bear. I think all that has happened is that the major central banks have delayed the inevitable and that a crash is still coming; however I've switched my view of where the crash will hit. I now expect it to hit hardest in the value of the dollar rather than assets such as real estate. In essence I have lost all faith in paper money.

Re: Vancouver real estate now 9.3 times incomes
 

Yeah, I mostly love it here. I jsut wish the people weren't so up themselves sometimes, oh, and that there was more a pub culture. I kinda agree with your assessment Dboy except I don't think it'll tank as a city. But it needs more grit, self-awareness, a sense of humour, something to counterbalance all the pretentiousness.

Alan, I've suspected for a long time that inflation is higher than the powers that be want us to believe, hence the asset inflation. I see where you're going with the dollar. Interesting times peeps, interesting times.

Re: Vancouver real estate now 9.3 times incomes
 

By tanking I meant staus quo - stuck between being a real city and an oversized pretty town. I believe the next 5 - 10 years are going to be a very important growth period for the place. I hope the place will grow and I don't mean more condos.

Re: Vancouver real estate now 9.3 times incomes
 

He sounds like a bit of a plank to me.

It’s not that homes in these places, led by Vancouver, are the most expensive in the world. They aren’t. Rather that they’re the least affordable. The difference is huge. Expensive houses in expensive cities like Hong Kong and London are affordable to the wealthy residents who live there.

Der ...

Expensive houses in expensive cities like Vancouver are affordable to the wealthy residents who live there.

That’s why they cost a lot

Yes Garth, they cost a lot because enough people are willing and able to pay that much. Quick, give the man a doctorate in economics.

Re: Vancouver real estate now 9.3 times incomes
 

Er, his point is that the opposite of this is the case. Residents of Vancouver are not wealthy, certainly not wealthy enough to pay the prices being asked. Sure the banks are happy enough to load us up with debt - but debt isn't wealth. His message is sound and his views are spot on imo.

In particular I am in complete agreement with:-

Re: Vancouver real estate now 9.3 times incomes
 

So who is?

Re: Vancouver real estate now 9.3 times incomes
 

Nobody I know could afford the average price without equity from a previous house and these are all well above average earners.

I do understand what you are saying, but the problem with it is that yes right now there are active participants in the market that are willing to pay those prices; either they are cash rich or are willing to leverage themselves up to ridiculous levels. However it's sustainability that's key, without new entrants into the market it will eventually stall and at best stagnate. Are you seriously suggesting that Vancouver will just become the playground for rich chinese people as that's the only way these levels can be maintained. Regular first time buyers with even above average incomes are priced out of all but the poorest areas.

[One thing about the original report is that there was one previously in 2008 that had the multiple at 8.4. Now I don't think Vancouver real-estate has quite recovered to the peak yet, which means that average incomes must have gone down.]

Re: Vancouver real estate now 9.3 times incomes
 

i.e. Homes might be more expensive in London, but wages are a lot higher (av. London individual wage is 40,000 pounds versus av. household income in Van is $58,000). Multiple of this to the average house price is lot higher in Van, hence it is less affordable.

The only thing keeping this all inflated here IMO, is drug/crime money, rich immigrants with money from either dubious or legitimate sources and those who have made money from real estate already. It certainly isn't from vast quantities of high paying jobs.

Re: Vancouver real estate now 9.3 times incomes
 

I agree. But the data is flawed because it looks at the City of Vancouver in isolation. You could not take the median property prices and median income of somewhere like, Chelsea, and draw any meaningful conclusions about the sustainability of property prices.

An ordinary person on an ordinary wage cannot raise, or service, a mortgage big enough to buy a riverside flat in Chelsea, just as an ordinary working person cannot raise, or service, a mortgage big enough to buy a detached house on the Westside. That fact alone tells us nothing about the ability of an ordinary working person to buy a flat in other parts of Greater London, or Metro Vancouver, or the sustainability of prices in those areas.

Re: Vancouver real estate now 9.3 times incomes
 

I am not sure I agree that much of the money is from illegitimate sources, but no doubt some is. That is not really the point. As you say, prices in the City of Vancouver are high because a lot of wealth is concentrated here. That is why the price to earnings ratio for the City of Vancouver is not a reliable indicator of a bubble, or its imminent collapse.

As I said earlier, I'm not going to argue that it is not an expensive place to live.