REVscene - Vancouver Automotive Forum

GLOW · 08-26-2016, 08:30 AM

Quote:

Originally Posted by SumAznGuy

$1.3M is only going to buy you a 1300 sq ft duplex in vancouver right now.

i've been out of the house hunting game for almost 2 years but if that's what a little duplex is going for in vancouver

Tapioca · 08-26-2016, 08:33 AM

It's hard to understand the perspective of people have who owned all their lives like the boomers and their parents. Why would they rent when they can own outright? Why would they be concerned about their investment if they have cash from the sale of their detached house, a company pension, and CPP? Such people are set for life.

MarkyMark · 08-26-2016, 08:37 AM

Quote:

Originally Posted by Tapioca

It's hard to understand the perspective of people have who owned all their lives like the boomers and their parents. Why would they rent when they can own outright? Why would they be concerned about their investment if they have cash from the sale of their detached house, a company pension, and CPP? Such people are set for life.

I really hope the place I buy goes up 20x it's value by the time I retire so I can be set for life too

Tapioca · 08-26-2016, 08:48 AM

Quote:

Originally Posted by MarkyMark

I really hope the place I buy goes up 20x it's value by the time I retire so I can be set for life too

What has happened over the last 2 years is an anomaly. However, the whole point of buying a house is to provide you with security when you can no longer earn an income actively. Everyone needs shelter and the reason why we slave away for 25 years (now 30-35) is so we don't have to deal with the stress of finding it when we are too old. At least if you have equity when you retire, you have options. The average person who cannot be disciplined with saving and index investing over the same period will be worse off renting compared to the average home owner when both reach retirement age.

The reason why the bloggers and the keyboard warriors are putting down owning in this market is because they are not the average. They are far more disciplined and mobile than the average person.

MarkyMark · 08-26-2016, 09:00 AM

Back when prices were normal I always had the mindset that buying was better than renting. I really wish I was born a bit earlier and was better setup to buy a place 10+ years ago.

Now with prices so out of whack buying feels more risky than ever. With such a dramatic increase in the last couple of years and now with the uncertainty of the tax, or possible future tactics to curb housing prices, has there ever been a more uncertain time to get in?

It ain't like you might lose 20k in value, there's a real possibility you could lose 100k in the next couple years if you bought in the last year or so.

Tapioca · 08-26-2016, 09:06 AM

We have to think about potential losses in relative numbers rather than absolutes. If you buy a condo and the market takes a 20% hit, you're probably only going to lose 40-60K. As long as you put enough down, you'll be okay when it comes time to renew your mortgage, particularly if you have a long term, like 5years. At the end of the day, it's a loss on paper.

That is why you're supposed to have a 20% down payment in the first place so you have enough of a buffer in case the market takes a short term hit. Again, that is why you buy what you really need at a price you can reasonably afford.

MarkyMark · 08-26-2016, 09:18 AM

Most of the people I know who bought in the last few years, none of them had 20% down. Hell most had the minimum. I'm betting a good amount of locals who bought in the last couple of years didn't have 20% down, I'd be interested to see the number of people who actually did.

Tapioca · 08-26-2016, 09:32 AM

I wish your friends and acquaintances well.

We put 35% down when we bought in May.

Liquid_o2 · 08-26-2016, 09:37 AM

Quote:

Originally Posted by MarkyMark

Most of the people I know who bought in the last few years, none of them had 20% down. Hell most had the minimum. I'm betting a good amount of locals who bought in the last couple of years didn't have 20% down, I'd be interested to see the number of people who actually did.

Interesting to hear.

GF and I are thinking of potentially buying next year, and are trying to save up and hit 25%.

MarkyMark · 08-26-2016, 09:40 AM

Quote:

Originally Posted by Tapioca

I wish your friends and acquaintances well.

We put 35% down when we bought in May.

I'm sure most would love to, but unless you get help from your parents or you sold a place and made a nice little profit, not many people can rent and save up 80-100k with prices where they are.

I bet house prices would be put in their place pretty quick if 20% was mandatory.

Tapioca · 08-26-2016, 09:46 AM

The market does suck for the first time buyer, I agree. I didn't want to sound like I was bragging, but I wanted to counter the common myth that everyone in this market is over leveraged.

You pretty much have to live at home or grind it with roommates for a while these days. There's lots of help from boomer parents too.

But on the other hand, that's why people want to get in because once they're in the market, they can ride the wave. The down payment is the toughest part.

MarkyMark · 08-26-2016, 09:53 AM

What percentage of people have 20% down vs. those who don't, if you had to guess?

Liquid_o2 · 08-26-2016, 10:34 AM

Quote:

Originally Posted by MarkyMark

I'm sure most would love to, but unless you get help from your parents or you sold a place and made a nice little profit, not many people can rent and save up 80-100k with prices where they are.

I bet house prices would be put in their place pretty quick if 20% was mandatory.

GF and I are trying to buck the trend and be first time homeowners with a larger downpayment. Right now, we are renting a tiny 450 SF place for a decently affordable rent. We are paying 14% of our combined take home income on rent, hydro, cable, internet, etc.

Hoping to get close to a $75,000 to $100,000 downpayment by next fall without parents help.

But I agree that this isn't the norm in Vancouver, most people I know who have bought in the Metro Region have bought with family help, whether it was assistance with a downpayment, inheritance, etc.

I would also find it interesting to see statistics on the percentage of what people put down.... not sure if the banks can release statistics like that.

MarkyMark · 08-26-2016, 10:42 AM

Quote:

Originally Posted by Liquid_o2

GF and I are trying to buck the trend and be first time homeowners with a larger downpayment. Right now, we are renting a tiny 450 SF place for a decently affordable rent. We are paying 14% of our combined take home income on rent, hydro, cable, internet, etc.

Hoping to get close to a $75,000 to $100,000 downpayment by next fall without parents help.

But I agree that this isn't the norm in Vancouver, most people I know who have bought in the Metro Region have bought with family help, whether it was assistance with a downpayment, inheritance, etc.

I would also find it interesting to see statistics on the percentage of what people put down.... not sure if the banks can release statistics like that.

The issue I've been finding is as I save, the prices have been inflating to the point where by the time I reach 20% the area I wanted is no longer where it was when I started saving.

So now I either keep saving and hope prices fall or at least stall out, or buy even further away and settle on the biggest purchase of my life.

EvoFire · 08-26-2016, 10:53 AM

Quote:

Originally Posted by Liquid_o2

GF and I are trying to buck the trend and be first time homeowners with a larger downpayment. Right now, we are renting a tiny 450 SF place for a decently affordable rent. We are paying 14% of our combined take home income on rent, hydro, cable, internet, etc.

Hoping to get close to a $75,000 to $100,000 downpayment by next fall without parents help.

But I agree that this isn't the norm in Vancouver, most people I know who have bought in the Metro Region have bought with family help, whether it was assistance with a downpayment, inheritance, etc.

I would also find it interesting to see statistics on the percentage of what people put down.... not sure if the banks can release statistics like that.

Good luck. We did the same thing, and then right when we were about to buy parents swooped in with more money so we ended up with a place that's way too big for the 2 of us(1300sqft instead of 800-900) and a 35% down payment(instead of 20%).

We got lucky because my parents downsized and had the extra cashflow to give us more money, otherwise we were looking at $400k townhouses in the Edmonds area.

We closed on in the beginning of January. At one point I estimated that were up about $120k after factoring reno costs and theoretical selling costs. Now with the slow down, I think we are up $20-40k if we are lucky.

Extra tips, leave a little extra for fixing up things and probably new furniture. Not everything fits even if you had furniture from before, and there are probably a lot of things that you want to fix up or replace.

I do think there are more "responsible" people than "research" gives credit to. But at the same time, being responsible doesn't mean they have the saving power to keep up with the market, nevermind being outrun altogether.

Traum · 08-26-2016, 10:54 AM

Maybe this is just my Chinese roots showing themselves, but as someone who received parental help on both my 1st car purchase and my first home purchase, I'm gonna say this -- don't be ashamed of getting help from the Bank of Mom and Dad. 99 times out of 100, if it is something within their financial capabilities, they would be willing (or even happy) to help, however much (or little) that help might be. Heck, when I was finishing my final year of school, I even borrowed money from my brother for tuition since he was already working at the time.

I'm not saying we should be bankrolling on our parents / family or taking advantage of them. In my case, my parents chipped in about 1/2 for my 1st car, and 1/2 of my down payment. In the case of my home purchase, their help enabled it to happen at least some 4 - 5 years earlier than I could have done on my own.

There is no shame in asking for parental help. After all, that's what family is -- you take care of each other when the need arises.

MarkyMark · 08-26-2016, 11:01 AM

I wouldn't have any shame in it, if they happened to cash out and sell their house and offer me a chunk of change I'd be all for it. Unfortunately that doesn't seem like it's in the cards the next little while.

westopher · 08-26-2016, 11:05 AM

Quote:

Originally Posted by Liquid_o2

GF and I are trying to buck the trend and be first time homeowners with a larger downpayment. Right now, we are renting a tiny 450 SF place for a decently affordable rent. We are paying 14% of our combined take home income on rent, hydro, cable, internet, etc.

Hoping to get close to a $75,000 to $100,000 downpayment by next fall without parents help.

But I agree that this isn't the norm in Vancouver, most people I know who have bought in the Metro Region have bought with family help, whether it was assistance with a downpayment, inheritance, etc.

I would also find it interesting to see statistics on the percentage of what people put down.... not sure if the banks can release statistics like that.

I don't want to pry too personally, but if you plan to save 75-100k, I assume you will be living quite frugally and making probably 150k combined income. Definitely something to be proud of if you can make it happen, but very unrealistic for 99% of vancouver's population.

Traum I certainly agree there is no shame in getting help, but again, not the norm for many people. I've very thankful for the help we have received over the years, as without it there would have been either no hope, or no fun for us over the past several years.

For the sake of conversation, we put down a little over 15%. I actually had the cash to put down 20, but I was willing to take a hit on the mortgage insurance to keep an emergency stash in case I lost my job, or couldn't work, as my wife has just the final stretch of her school. It was a poor decision as far as money spent being that it cost me about 6k added to my mortgage, but worth it for the piece of mind for us to have a safety net.
Now we can live in our new home completely consumer debt free, with a few months worth of wages sitting in the bank. That to me was worth the price rather than be stressing.

Tapioca · 08-26-2016, 11:06 AM

It depends on the area we're looking at too. 20-40% is probably the norm in Vancouver, Burnaby or Coquitlam because that where the Asians are. Chinese people tend to have help, or they grind it out at home for several years living rent-free. I know it sounds ridiculous to a non-Chinese person, but this is how it works.

I asked a somewhat facetious question about 150k down payments a couple of days ago. Not to my surprise, there were people who raised their hand and claimed they have that liquidty ready. It's RS after all... Home of the underappreciated, but fiscally responsible Asian.

IGTBAR · 08-26-2016, 11:12 AM

MarkyMark · 08-26-2016, 11:14 AM

Haha RS is the last place I'd go to get stats about the general public, everyone on here is ballin' on their own dime or someone else's

westopher · 08-26-2016, 11:16 AM

Quote:

Originally Posted by MarkyMark

Haha RS is the last place I'd go to get stats about the general public, everyone on here is ballin' on their own dime or someone else's

The thing is, its a car modification website.
If you can afford to even own a car in vancouver, you either have a good job or parents that pay for it, never mind a nice car that you can blow thousands a year on mods haha.

IGTBAR · 08-26-2016, 11:17 AM

westopher · 08-26-2016, 11:19 AM

I bet your 40% down payment 4 years ago though would be a 20-25% down payment on that same condo today.
I've said it before and I will again, we can't discount the trouble that people have inherited simply because they have reached home purchasing age at the worst time in history to purchase.

Tapioca · 08-26-2016, 11:19 AM

Quote:

Originally Posted by MarkyMark

Haha RS is the last place I'd go to get stats about the general public, everyone on here is ballin' on their own dime or someone else's

And the financial situation of millennials isnt as dire as it's portrayed on other sites, like reddit Vancouver.

The truth is really somewhere in the middle.