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@jasonturbo Buying a home is still somewhat affordable for well-to-do yuppies. A couple of friends of mine bought a home in East Van a couple of years ago in the 550K range and I'm certain that they make probably 150K or more per year as a couple. If their mortgage payment is in the 2500 range + plus a basement suite bringing in 700-1000/month, it's not hard for them to make ends meet. Also, another thing you've failed to consider is wealth transfer and home equity lines of credit. Sure, there are a lot of couples who make 60K/year, but there are just as many who make 150-200K/year under 40. (You seem pretty successful yourself and I wouldn't be surprised if you're close to 6-figures.) Until one who works on the financial side (a mortgage lender or someone like that) chimes in and tells us how much cash is actually being thrown around, we can only speculate on what's driving the market. |
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Lets dive even further: ~1.2M people earn > $89K 13% of those live in BC, or ~150K If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites 7% at best is not "just as many". Wow, have we ever lost sight of reality. Quote:
Now, remember when I said stay with me? if those Loblaws employees cannot buy, then no wealth is transferred. Houses don't appreciate when there's no buyers to drive up prices. Very little actual cash is being thrown around, just people buying and driving up prices. |
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- Mechanics - Medical practioners - Planners and consultants - Oil and gas workers - Education/teaching - Finance-related At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work. |
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What you described I'll call "locker room theory", let me explain: I hate it when I go to my locker at the gym and someone is using the locker right beside me. It seems like it happens far too often. In truth, it rarely happens. I only remember when it does happen - thus why it seems like it is so often. Apply the same to your circle of friends. Scan the list of jobs you quoted, most are interesting jobs that would be memorable. Are you going to remember those with the interesting jobs you listed? or those who manage grocery stores, pickup garbage, ...? I actually think people under 40 are doing far worse than the numbers show. Seniors have the highest average salary, and have made the highest salary gains of any age bracket in the last couple decades. If you average out seniors, then everyone else is actually doing worse than decades ago. Yet before we get too far off topic, revisit my Loblaws employee example. $50K total income buys $300K mortgage. Thus $80K income buys $500K. The average in Vancouver family income is just shy of $70K, thus the average family can afford a ~$450K mortgage. This is why house prices are crazy. When the average family can spend half a million dollars under the current rules, then prices go up. If they couldn't afford it, then wealth cannot be transferred as existing owners cannot sell to move up. Its really that simple, just on a grander scale in Vancouver cause it is s desirable place to live, and real estate dominates conversations here. |
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Another interesting number is the average Canadian down payment is at 7% lol I guess people like giving their money to the banks. (In the form of interest) I do make well over 6 figures and have no interest in buying real estate in Vancouver, also depending on the list you read, Van has been long since knocked off the list of best places to live in Canada and the world, mainly due to the cost of living. Having said that, you could probably replace the tap water here with cat piss and I still wouldnt want to leave. At the end of the day, is the value of real estate here far beyond what the average income earner can afford? Accoding to stats can and conventional financial wisdom the answer is yes. Is it possible we are heading into a new age where being house poor is the new norm? I suppose it's possible, but just as the herd runs one way, the run the other just as fast so IMO it's impossible to predict what will happen. You should never under estimate peoples stupidity, and to be honest, once I can immigrate to the states I will probably reside south of the border. |
2500 a month mortgage? LOL. even if you put 200k on a 35 year mortgage, at 800k (average house price) your still playing over 3k a month for a mortgage. |
Great info here guys. I just want to comment that although people are limited by their salary (Say avg family income of 70k), people are still making it happen. Families with multiple generations in one home, renting out suites, renting rooms, international students, help from parents etc. I own two condos in Victoria (one residence and one investment). I rent a room in my 2bdr condo. The Spain situation is downright scary: http://www.financialpost.com/news/fe...059/story.html |
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You have a select sampling, These people all -Graduated high school -Cared to attend a reunion Most of the lower income earners probably did not graduate and were even less likely to attend a reunion where they would be judged for being unsuccessful... and some of them are probably lying about their finances lol. Look at it is like this, they measure median household income the same way year over year, just like they measure average cost of single family home every year... it's all about the constant variables which are examined that provide reliable data. So food for thought on that, 2000 Median household income 49940$ 2001 Single family home 380000$ (just couldnt find 2000 price so used 2001) 2010 Median household income 58200$ 2010 Single family home 987000$ So in the same time median household income went up 9000$/year, the cost of the average house has increased by 607000$ |
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I find it awful that "people are still making it happen". It means the rules aren't tough enough to discourage people from the wealth trap. Spain is especially scary, cause it is already happening here. Think about your friends/family that own and how many of them have cut back on expenses to be able to afford the mortgage - in particular any FTB who has bought in the last couple years. My old neighbours in Ottawa did exactly this, going out less cause they had less disposable income. My coworkers in Vancouver often cite their mortgage as a reason why they cannot afford to do as much as I do. I have lost teammates in Vancouver cause once they bought they could nolonger afford the sports team fees. Hell when I moved into my rented condo the landlord asked if I'd throw the previous tenant a couple hundred $$$ for moving in early, the previous tenant had just bought and could probably use the money. ARG! If you can afford a half million dollar mortgage, you shouldn't be worried about $100 here and there. Its so awful what people will sacrifice to own a property. Worse that our economy is 70% dependent on this spending. The money is being funneled into banks rather than the general economy. |
Once again, courtesy of Global News... "Mainland Chinese Creating Vancouver Millionaires" |
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