WTF are you talking about, you're quoting me talking about 80/20 for realtors (80% of sales go to 20% of realtors- hence why anyone wanting to get into real estate, regardless of the market health, may want to reconsider or at least know the risk profile of that specific sales job), and you pull up me having the same rhetoric.

whilst i appreciate how much attention you want to give me, fact is that people can't afford to buy but want nothing more to own - why? what is the obsession with owning?

rent vs. buy is never clear, but financially, in Vancouver, it couldn't be clearer.

you can't prove shit, i can't prove shit re: the cause of house price increases. i'd rather be in the low risk position when no one knows shit, but by all means, buy up real estate in vancouver, get high on debt all you want. i'm wealthy, no risk, no stress. if it all comes crashing down, i'll just say 'told you so, a bit late, but better than never' - if it doesn't, i'll still be just as stress free and wealthy and still with no desire to ever buy at these crazy prices.

be at peace with your position, that's all you need - it's what i have

i do, i never try to time anything (i took a mega punt on US real estate at a very low risk time, financially for me, and i won pretty big - was a punt, worked... was play money and was 100% levered - was fun, would never do that on >$1M for a single asset)

What else are hawt Cactus Club waitresses suppose to do when they turn 25? haha! should I be a sugarbaby or a high end real estate agent???

You actually have some very good insights and bring up allot of valid points, but your constant bragging and flaunting about how smart and rich you are gets tiresome......

I feel like Vancouver Real Estate is like musical chairs right now. I am too chicken shit to invest in Vancouver Real Estate right now, but I have allot of friends buying, renovating or building new houses that are making some serious cake right now. No joke, my hairdresser has built 3 new homes (Westside Van Specials) over the past 5 years and now lives mortgage free in a 3 million dollar home. He's obviously no genius but I give him props for doing it Vs sitting on the sidelines like me.....

wealthy != rich, there's a big difference. you don't have to be rich to be wealthy, i'm not rich, but i am very wealthy.

and i think we should all be proud of being smart, seeing beyond the headlines, knowing risk, and making smart, educated decisions. when it comes to Vancouver real estate, everyone is in "it's a no lose 'investment'" mode

not even close to the truth by the intense interest of this thread which was originally titled "Vancouver Real Estate Bubble" and the popularity of bear like Garth Turner. The mass media and average person on the street are more worried about a housing downtown than a housing boom.

someone people might be in the "no lose investment" mode because anyone and who has sold his/her property in Vancouver in the history of this city has lost money or have been a renter for who knows how long, so i guess a little bit of irrational exuberance has some justification.

lol housing is def. going to tank at some point, interest rates will be the determining factor.

You'll know shit is about to hit the fan when developers start offering typical 600 sq ft units at a discount because they can't move them. Developers have decently high margins so they can cut the price down significantly.

It's a funny economic situation for most people though, what costs more? 20% more expensive home at 2.5% interest... or 20% cheaper home at 8% interest etc.

i "should" be in a position to buy w/ cash after shit hits the fan so I DGAF about mortgage rates.

People view affordable today as what they can afford monthly... terrible way to see things when you might have to renew at a an unknown rate.

Doesn't matter if you're bear or bull, make sure you can afford your home when you have to renew at "real" rates or join the thousands of others who have to sell their homes to escape.

(Based on 500K mortgage) 2250$/month @ 2.5% turns into 3820$/month @ 8%... and for every 1% increase in the BOC overnight lending rate expect banks to tack on .5% or more on top.. so to see 8% within 5 years is certainly not out of the question at all IMO.

See how many people can afford 500K condo's w/ a 75k median household income and interest rates back to reality.

Remember back in 2009 when Onni had to blow out their condo units and were offering them at 20-30% discount? That wasn't too long ago...

And Onni continues to be the largest builder in BC today..

Honestly, the way things are going people can talk about a bubble or a "correction" till their blue in the face. To me it seems like there's an equally good chance people will be looking at homes 2-5 years from now and wished they had gotten in when it was 80-200k less.

I don't have much to add, but me and my wife just purchased our first home. I'll simply add what made us finally decide to purchase.

We pay $1650 for rent. We found a home that allows us with an 18% down payment (yes I know I'm stuck with a CMHC insurance payment, but we will be able to remedy that with a large lump sum payment soon) to pay less for our brand new home in an area we love for the same price as our rent for mortgage, taxes, condo fees, etc. as we pay for rent right now for a place that is 100 years newer and has many more amenities (underground carwash bay motherfuckers!!!!). We are taking a move to a cheaper area but its just as good for us and what matters to us. If mortgage rates fly through the roof, its still easily in our price range to live in a place we love. Over the next few years we will be hopefully smashing our mortgage with large lump sum payments when my wife's new job starts.

We used logic, math, and a bit of passion (being slightly farther from work, but being much closer to snowboarding) to make our purchase. The problem is people are only using 1 of the 3 to make the decisions in this city, but as long as the bank is lending, people will be making those poor decisions.

Looking forward to moving into our new home in North Vancouver, and hoping for a shitload of snow in the mountains.

But what if the bubble burst and then you owe more on your mortgage than what the house is worth? :troll:

Congrats on the purchase.

Lol, basically, I'll cry, and we will just keep on paying it. Based on how much we will pay, it could only negligibly be more than our rent if the bottom fell out, and we will still have a place to live that we love, and can afford. The bottom falls out of the real estate market, I'm stuck with a place to live that isn't worth much. The bottom falls out of the stock market, I'm stuck with nothing.

congrats on your purchase Westopher, the north shore life is pretty sweet!

Congrats on your purchase. :thumbsup:

You have a roof over your head in a desirable neighbourhood. I think you'll be ok.

8% within in 5 years is pretty much out of the question. We are at 0.25%. To get to 8% in 5, It will be the steepest rate increase other than the 80s. US can't do this while the rest of the world is deflating like crazy. Canada certainly is not going to increase rates, let alone at that rate, not with commodities in a slump like this. Certainly "not out of the question".. I would rank it as nearly likely as North Korea decides to invade Canada for our wheat.

The feds previous minutes mentioned they will top out at most 3% in 5 years. The last time we had 8% was 91.

Today's fed report inflation increased 0.1% and they are already jumping up and down and say it is good news. (it is not great news, but we are out of good news).

1% increase on a 2mill mortgage is 20k, if you can't take that increase.. Chances are you won't been able to qualify for the mortgage in the first place. Mortgage lenders aren't exactly dummies, with so much data digitized these days everything is already taken into account.

Honestly the bears had it wrong (including me). The horizon for rate increase is getting longer and further in the future. They can only increase interest rates at a much slower clip probably at most 0.50% per year. And yes, that means US Fed cannot use interest rate to save our collective asses any more.. but that's the way it is.

The fact that Amazon, Microsoft are expanding in the Lower Mainland means for the high tech sector and LNG pre construction work are saving BC's real estate's bacon.. Commercial Real estate is extremely tight in Lower Mainland.. like it or not, Clarke and Robertson deserve a bit of credit. I didn't know how they did it, but avoiding the Northern Gateway turns out to be a better move. Waterloo / Kitchener houses, not to mention the 6s are also in a bidding scenario but they are not as dirt limited as we are. People who can code properly are in demand and they can afford houses once they have been established. It is now the geeks (people who survived 4th year university math) who own the world or can afford to own houses in Vancouver.

If you can afford and need a house ie with dirt now, buy it. If you are investing, and you can afford to lock in that amount of money, for that long, the return might be attractive (say 12% pa), but you have risks that reflect this. I still think equities are more liquid.. but it is also in a pretty big risk, since we are now the longest expansion phase of the cycle ever. The only sane way is to diversify.. However to do a multi million $ divestment might be out of most Revscene price range.

So if the fed gets to 3% in 5 years, where do you think mortgage rates will be? 3%?

It doesn't work like that, if the Fed goes to 3% expect the banks to be sitting at 6% or more.

Westopher! North Van all the wayyyyy!!!!! Did you move to LOLO?

Congrats, Westopher! Wife and I bought last year and remain very happy we did.

A girl I work with downtown, told me she is buying a place in Squamish and communting...at first I thought she was nuts, but actually it makes allot of sense if you spend most of your time on the north shore and downtown. I would rather live in Squamish then Surrey.....

I know many families who have been saying that during the last five years and they are crying hard now.

If you are planning to purchase a home then you are still facing market risk by waiting for this crash, given how strong the price momentum and market sentiment is.

Unprecedented != bubble. There are still so many foreign buyers and younger Vancouverites (ie millenials) who want to buy, but can't at this price, that I simply don't see a "massive" price crash in the foreseeable future in this market. Unless you are a highly levered speculator in this market, who would panic sell? We like to shit on foreign buyers but a majority of homeowners are still domestic Vancouverites who can hold until retirement.

I believe Westopher made the right choice. If you are planning on buying a home, you shouldn't try to time the top or bottom. Markets will fluctuate. Take on reasonable amount of debt and buy something you can afford while passing basic stress tests.

That said, I agree with 4444 that you need to diversify your assets and invest in other asset classes for your personal wealth management. Obviously that requires buying a home within your means.

I'm not waiting for crash to save money on the purchase price, I'm simply not relying on low interest rates and will be happy to buy after rates have gone up ;)

That's why I made the comment about buying now with dirt cheap rates and seeing a 20% drop in equity is probably no worse than waiting and buying at 20% reduction in price and a much higher interest rate.

Meh, when it's your home you plan to live in for a long time it almost doesn't matter what you pay for it, so long as you can afford it.

This year is a bit different than the previous years since it is almost certain that the US will raise interest rates next month. Canada has to follow, they can wait it out a bit but no one will buy Canadian bonds.

Remember in the 80's it was the 14%+ interest rates that killed the market.
I'm looking forward to see how the market is when mortgages are 6%+ to see if my theory was right.

u know i wouldnt make any serious bets on that.

I wouldnt be surprised if they lowered it again, or kept it flat. and no raises this year.

just cuz everyone says they will raise it in sept doesn't mean they will.

markets have been going sideways all year. FOMC minutes keep saying they want the economy to perform better before raising rates. and economy isnt performing "better".

Lol no offence but every year is a bit different than the previous years. When other countries around the world are lowering their rates, why would Canada go out of their way to quickly match the US rate increases? To kill whatever is left of our shitty manufacturing sector? Or to purposely crash the real estate sector?

I also feel like the fed will stay flat for the next quarter, no rate increase until Q1 2016 after they see what holiday sales are like.

I could see Canada lagging behind US with interest rates, our low dollar is for the best at the moment, encourages tourism, foreign investment, reduces the likelihood of Canadians spending their money south of the border, benefits MFG and exports etc.

Canadian bonds are highly desired due to the low debt to GDP ratio, we can easily service that debt and that keeps bond prices/yields in check. This in itself could allow us to keep out rates down for an extended period of time.