^ freaking awesome article that you wrote

"Chuck Norris does not know where you live, but he knows where you will die."

Epic post by Chuck ..

I agree. I am a software developer and expected the market in Vancouver to be decent after the stories I've heard of EA and other companies, plus Seattle (Amazon, Microsoft) is just accross the border. What I found is the industry is weak here, and consider myself lucky to have found a great job.

I don't think we need time to tell. I play sports with many 25-35yos, and the recent talk is of when people are moving home. They moved here from across the country (and some from other countries) to take advantage of the booming economy before the games, and stay for the festivities. They already see the economy cooling, and have plans to move back if conditions worsen.

Some never planned to stay. The city is too expensive to raise a family, and they plan to enjoy their time here while it lasts, then settle back where they came from.

Of my 5 friends and 2 family members that moved to Vancouver, only 2 friends remain. The rest warned me against SAD.

This is an awesome example. In 2000, 10 yrs ago, you were renting for a $400 loss. The market has only gotten worse since then, and rents have not skyrocketed with housing.

Good point, I had not considered that.

I don't think they'll hit 8%, 6% is very possible.

I would love to know why some buyers are snapping up condos to rent. The only way they can be making money is by leaving a huge downpayment, which would be better invested elsewhere. :confused:

Correct. This was the bear argument earlier this decade. The price/rent multiple was not within historical norms. Keep in mind my mortgage was over 25 years and the interest rate was higher. If I refinanced last year on a 35 year term I would have been sitting really well. The fact that rents haven't moved forward too much in the last 8 years would suggest that if rents are at the maximum for affordability, why should the price of ownership?


I'm sure you know of plenty of people who have locked in or are on a variable in the 2.5-3% range. 6% is enough. 8% is nothing too crazy however I do agree that it's not going to be going that high anytime soon.


Monkey see monkey do. I already admitted I copied what others did. We don't go back Taylor but I know you enough from the forum to know you're self aware of the general thoughts on the market. We all know of at least one person who made a lot of money in real estate over the last 5-10 years and sooner or later, people want to get in on the action. Someone has to be last.

Like I said, I had no idea things would have gone the way they did. I knew when I purchased there was going to be capital appreciation but I never planned on making as much as I did.

People might hear my story and think "I want to do it to!" and they will get involved but past performance is no indication of future performance. Take my trading for example. I made money but plenty lose it. A few poker players make money but most do not.

I'm not trying to discourage anyone but the fact is markets have cycles and being patient and waiting IS an investment strategy :)

I stole this off RFD. It argues that the governemnt's policy is not helping the steam in the real estate bubble. A US stye meltdown is possible.

As for BC's housing, I was talking with a client who's quite involved in real estates. He points out that one of the reasons, among many, why the sky high housing price is "sustainable" is due to endless supply of drug money. The original report on the first page is a comparison of median income to house prices. However, tons of illegal money are not accounted for. So even though housing is too expensive for locals, there are still money in the system to back it up. Take it for what it's worth, I just wanna throw it out there for discussion purposes.

I like to think of Vancouver is a debenture. There's no real industry backing up economy. All you can count on is its credit worthiness

I may be wrong but here's why I think there's no high paying jobs here: We don't have any big employers who make big ass profits. It's all small biz or small sites of big companies from some place else.

Thanks for the great reads Taylor and Chuck Norris!

I can really relate to what you guys are talking about in that my dad, uncles, friends' parents, etc. came from China in the 1980's, invested in Vancouver's real estate and are now all millionaires (doesn't even include monies earned from their dayjobs); not because they understood the industry (and they don't claim to *cough*). They understand that they were in the right place at the right time, and I know many others that are trying to duplicate their successes ATM and are struggling financially like crazy LOL.

Can you guys give us some reading recommendations? Thanks! :D

At the end of the day, everything will depend on how the market move, and there is no way to tell for certain how it will move.

People think vancouver housing is overpriced now, but they also thought it was overpriced 10 years ago. So perhaps it is, perhaps it is not?

There are people like taylor192 who believe with 100% certainty that price will go down a lot. While there are others who believe it could only go up.

I think everything we know and believe are already reflected in the market value, so whether you take the invest money + rent option or the buy option, there is always a 50% chance you will do better or worse than the other option. It all comes down to you luck.

Vancouver used to be a base for the logging and forestry companies, but we all know what's happened to that industry.

I don't think having big companies necessarily means that you won't have decent to large salaries. Anyway, I'd like to know what's considered a 'large salary' - Chuck Norris' 200K USD? 40k? 60K? 100K?

Mind you, there are a lot of cash 'businesses' out there and much of that income is unreported.

Have you thought about buying up property in the states right now?
I've heard stories of condos in Miami that were over a million a couple years ago are sitting around $300k right now. Sure if might take a couple years but I'm pretty sure those places will be around a million again.

The Vancouver market is built and hyped up by foreign cash and drug money.

Its the cash injection from these two sources that drives this real estate market or any other market really.

Vancouver is similar to Miami back in late 70's early 80's. The housing market will only "burst" or "crash" if the cops have some sort of handle on this drug trade.

Actually, the more enforcement there is, the higher the stakes become and thus, the potential profits are even higher. The biggest dagger to the drug trade (and a large chunk of local ecnonomy), ironically, would be legalization of drugs. This of course would never be palatable politically, nor would it make sense from a public policy perspective either.

Damn. You boys all about to buy land. That's straight ballin'.
Unfortunately this is my total net worth. True story:
http://dcfud.smorgasblog.com/userimages/pho1.jpg

love the discussion in this thread
chuck norris and hypa's accomplishments by the time they hit 30YO is quite impressive but I'm still on the skeptical side with taylor
it encourage us young folks of what we're capable of doing but at the same time puts us to shame that our income and the market value is messed up.

new mortgage rules released by finance minister jim flaherty today:

http://www.theglobeandmail.com/repor...rticle1470117/

http://www.canadianmortgagetrends.co...n-the-new.html

thoughts?

I couldn't speculate how this would affect the housing prices in general. However, it does shows that the Government has plenty of tools in their arsenal and they are not afraid of deploying them in order to slow down the housing market.

You have good points but i dont agree with this. A piece of real estate should ALWAYS be viewed as an investment. Yes the times of easy flippings are over but you priority should still be focused on being able to sell in the future for a higher value. I bought a 1600 sq ft condo last year focused on the priority of living in it. Fantastic location, good structure, nice place. But after a year, and adding the numbers (as well as finding hidden discoveries), I am regretting coming in with the wrong mindset. If i came in with the thought of investing, i wouldnt of bought this place, instead bought a 'less' cool place to live and have it worth more and easier to sell this or the up coming years.

That being said, no one is saying you cant live in your investment or you have to come into a purchase thinking to make a killing because those are false assumptions. However do always go into a real estate purchase with the idea of selling it in the future and you will find yourself having a decent return.

Im currently looking for another property, but waiting till after the games to see how things go haha.

yup, because vancouver is a service market. the tax....

if you can straight up pay cash, then it would be a good opportunity. But with the US economy the way it is atm, no one with money is willing to risk it.

Unless you're planning to pay for the condominium for straight up cash, it's virtually impossible for foreigners to obtain a U.S. loan at this point in time.

Won't affect much...nothing bubble bursting, but it's something. Almost like "putting a bandaid on a third degree burn".

I only just found this thread read every word of it. Awesome thread!

My question is: What advice would you give to new grads ? (as I'm sure there is a lot of them?)

What is a general path to follow for someone starting out w/ their first full-time career job?

Save like your life depend on it. Scrap ur smart phone plans, stop eating out, pay off ur debts ASAP, get a yaris if u really need a car, if not, take the bus, forget about brand name clothings, live with your parents until they kick u out.

Simply put, live life like a bum and save every penny you can save. If you can do that, u should be on the right track in ~ 5 years.

not really - who says you should live in vancouver? its totally unaffordable for no real reason

i earn good money, could afford to buy the place i rent, but why, it'd cost me between $500 and $1000 a month MORE to pay interest + principal (depending on if i go closed variable and get raped in a year or 2, or fixed 5 year)

you could argue capital appreciation, but i think we're not in a position to see large capital appreciation over the next 5+ years

so i'll enjoy my extra $500 - $1000 a month, and spend it on things such as a) investing/starting businesses/ventures and b) enjoying life - i've worked hard to where i'm at, might as well enjoy it (within reason)

i'm also considering moving to so.cal, a place with much nicer weather, more career opportunities (in my field), and a much more realistic cost of living (i've lived in LA before, so know what i'm getting into, i love it down there, before all the typical canadian responses of 'oh its america, there's no economy down there' - trust me, there is, and its much better than vancouver's small minded economy)

^ you do realize that it is very hard nowadays to get permanent residence or sponsorship. Im looking to move as well, to irvine. And keep in mind that although there is plenty of more opportunities, there is also 10x more competition

I noticed that when you go to a major US city that has a fortune 100 company headquartered there, everyone is a go-getter and everything is so fast-paced and busy, not chill like hippy vancouver. I also noticed that when you meet americans, the first thing they ask is after greetings is usually, "what do you do for a living?" Canadians usually talk about hockey or current events :)

Homes are definitely cheaper in the states, but be wary of property taxes. I was looking at a lakefront home in texas, only $430 000 for 4bd + 3bath. but the property tax was around $8 grand. But still, better than anything in the lower mainland.