Some may be (and have been) questioning what is so great about Vancouver (besides the balmy winters). I know that I have been questioning that myself, and decided to look up housing prices across this great land - just to see if Vancouver prices have a modicum of rationality. Nope. They don't.
Here are the average resale prices, how much they have moved (either way), and average rents in Canada's major urban centres. House prices are looked at November 2005 - November 2006, and rents are looked at October 2005 - October 2006. (Resale prices of homes are from MLS stats, and rental stats are from CMHC link)
Vancouver - average resale price - $519K (up 16.5%)
- average rent - $1,045 (up 4.4%)
Calgary - average resale price - $360K (up 36.4%)
- average rent - $960 (up 19.5%)
Edmonton - average resale price - $282K (up 42.5%)
- average rent - $808 (up 9.9%)
Regina - average resale price - $123K (up 11%)
- average rent - $619 (up 2%)
Saskatoon - average resale price - $167K (up 9.6%)
- average rent - $608 (up 4%)
Winnipeg - average resale price - $153K (up 14.8%)
- average rent - $709 (up 3.4%)
Toronto - average resale price - $355K (up 4.2%)
- average rent - $1,067 (up 1.1%)
Montreal - average resale price - $218K (up 3.2%)
- average rent - $636 (up 2.8%)
St. John, NB - average resale price - $141K (up 13.8%)
- average rent - $556 (up 2.1%)
Halifax - average resale price - $194K (down 1.2%)
- average rent - $799 (up 3.5%)
NFLD (all) - average resale price - $135K (down 3.4%)
- average rent - $635 (up 0.4%)
Talk about regional disparities. Vancouver % increases pale in comparison to Edmonton and Calgary, but in those cities, houses are still affordable. Further, all of Canada has been heading to Alberta because of the oil boom. There are very well paying jobs there. Even burger flippers and Tim Horton's workers are fetching in the neighbourhood of $20/hr, and could entertain the idea of buying their own home. In Vancouver, even the best paid (Dr's. lawyers, etc.) are hard pressed to come up with the money to buy the crappiest of places (and I include brand new 500 square foot condo's in that assessment).
Anywhere east of Alberta (with the exception of Toronto), I could buy a place pretty much outright. In some places, I could do so and have money left over for a new car, a few holidays, etc. And, Vancouver has some of the lowest median earnings in the country. In a lot of those cities, one could buy a place with 0% down, and the rent would cover the mortgage payments. Here, one would need 50% down and still fall short of the rent covering payments. We have had the hardest winter weather of any city in Canada so far too, so don't tell me about how great the winters are here. We don't even have the equipment to keep the streets free of snow and ice here. Montreal spends $50 million per year on snow removal. I would be curious to know how much ICBC will be paying out to motorists who crashed into each other on our snowy/icy streets. I'd bet that it is in the tens of millions.
So what is it about Vancouver? I think I have an idea. The soil in BC has very low levels of selenium, and hence, low levels in our food (even food from California, etc. Selenium levels fall drastically west of the Rockies). Selenium is crucial for brain function (I take supplemental selenium - so I'm ok!).
There you have it - the brains of British Columbian residents are operating in very low gear. That explains so much - poor driving habits, self-centredness, buying unaffordable real estate, the gov'ts that keep getting voted in, etc.
We are collectively brain-dead. Vegetative. Stunned.
I'm outta here!
13 comments:
Do you guys ever think that it could be a small group of people buying and selling all the houses in Vancouver. And those small group might well be real estate developers or hired by real estate developers... deep thoughts
Thanks for posting peter. You seem to be utilizing my dietary supplements.
I'm not sure that that would make a lot of sense though. When you imput PTT, lawyers' and conveyancing, GST, etc., it would be a losing proposition. It would be non-sensical.
I think that it is marketing - in conjunction with poor education, and/or low brain function.
It's the lack of selenium man!
Do you guys ever think that it could be a small group of people buying and selling all the houses in Vancouver....
Further on Peter's comment. I think he might be on to something. My husband and I have been thinking that this might be going on. Especially in certain neighbourhoods in East Van. Crap houses that have been on the market for months and months are suddenly sold right after Christmas by a brother real estate team. We're wondering if these two guys are buying each other's listings. We'll be watching if these properties end up back on the MLS.
Peter said: Do you guys ever think that it could be a small group of people buying and selling all the houses in Vancouver. And those small group might well be real estate developers or hired by real estate developers... deep thoughts
There is a few companies in the U.S that buy up the crappy houses and fix them up in a certain amount of time and resale with a profit.. A T.V show called "Flip This House" It airs on TLC every week.. they do exactly that..They go in and inspect the house and property and then decide if it's worth fixing up.. If they do then they renovate.. inside and out in about a month or so and then flip it at the end.. Plus they make a profit.. I'm sure that a few do that here in Canada...
"Do you guys ever think that it could be a small group of people buying and selling all the houses in Vancouver."
I think these people are called drug dealers / growers. All of the marijuana grow operations are in homes that typically were purchased by organized crime. I read a newspaper article that said there were 1300 home based grow ops in Surrey alone.
If you're a first time buyer right now in Vancouver you are SCREWED. There is nothing you can do but hope prices come down. You are competing with a lot of people that made a lot of money in just about any real estate investment in the lower mainlaind over the last few years. Also over the last 5 years you were competing with people that had a favorable renewal gap (from VHB meaning 5 years ago a person qualified at a higher percentage of interest than when they renewed their mortgage over the last few years). That's two huge competitive advantages that are hard to overcome if you weren't in the market.
A bit of a virtuous cycle on the way up and hopefully a vicious one on the way down. Renewal gap is now gone. Home equity is on its way down. Unfortunately economy is still strong and there are lots of jobs otherwise it would be a slam dunk big crash. I think even with a strong job market we could easily see 25 percent down.
Great rant! and I don't think it would make sense for a small group of people to be buying up stuff - without external support it crashes eventually anyways.
Housing is an emotional issue and I think some people have been conditioned to believe that this is just 'normal' - after all people were buying right up to the big crash of '81. I don't think most buyers are paying as close attention to the market as some of the readers here. How many people know that the REBGV benchmark price has fallen in all categories since september, and this with a strong economy and demand?
Don't blame the grow-ops. How else are you suppose to afford a house out here?!?
I'm originally from back East and got a real kick watching the city struggle with the snow this winter. My favorite was when the city guys I stopped to borrow a shovel from, to clear away the slush from the end of an alley I was trying to get into (steep hill; truck kept sliding when I was trying to turn). Rather than take 30 seconds and push all the slush away from the drive, they thought it would be a better idea to shovel 15 or 20 lbs of salt onto 20 square feet of snow that was already melting (no exageration; we're talking like 10 big shovels worth; I just sat there shaking my head).
I'll be interested to see just how green this city is come spring/summer. It would be interesting to know how many lbs of salt Vancouver went through in comparison to Montreal or Toronto this winter.
Good luck with your gardens.
Great post solipsist, funny and true.
You oughtta be careful telling vancouverites about selenium though, we have a habit of going overboard with exhuberance on some things and selenium is toxic in large amounts.
Do you guys ever think that it could be a small group of people buying and selling all the houses in Vancouver.
I think the ice on your tinfoil hat is freezing your brain.
Vancouver has almost always been the most expensive place in the country to live. Its probably close to an all time high in the disparity level, and will come down.
Thanks for commenting all.
ATTENTION VANCOUVERITES!!!
As pointed out by the pope, selenium can be toxic in large amounts. Talk to your Doctor if you are suffering sluggish brain activity.
solipsist is NOT a Doctor, so do not follow any perceived medical advice found here. Also - I may be taking too much of it myself - resulting in synaptic dysfunction, caused by too much electricty in my brain. This would explain why I feel that things are beyond any reasonability here while so many have rushed to buy.
Your thoughts may vary.
Imagine you are in the real estate development business. You have 1000 units in inventory to sell to the market. Say each unit can sell for 500k each. Assuming profit margin of 30% if all are sold. You are looking at 1000 x 500k x 30%. If they can speculate or corner the price of that particular area (e.g. buy and sell to create several transactions in the secondary market of similar unit to 600k per unit).
They can spend a relatively small amount of money to generate a potentially huge profit. It's just too tempting not to do it!
It's the same principal in the stock market and commodity market (e.g. oil) Oil production countries have a very high incentive to push up the crude oil price in the commodity market.
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