what? you totally botched the quote, that's not what i said or was referring to.
Well yeah cause I was only responding to one small part. The other was a joke I would have thought the blah blah blah would have clued you in, that and you never said any of it.
Ha Ha! Made you look.
I'm 30 years old; I'm part of the young generation. Not to generalize but looking around I can say that the majority of my peers make good money (better than me) but don't know how to save, it's blatant. You make great money; financial constraints that might limit someone who makes mininum wage do not exactly apply to you.
I'm banging my head against the wall trying to figure out how you can't save or get ahead making $100k a year. What kind of car/truck do you drive? Do you have an $8k carbon fiber wonder bike in the garage or are you riding something a couple years old? Do you have an expensive coke habit that's gobbling away all your spare money?!?
re: becoming burnt out and missing out on enjoyment outside of work, yeah that's a reality. Working hard and being burnt-the-fuck out for a few years is totally ok and will not kill you. This is going to be more blunt than intended but, what's your priority in life? Do you want to:
a) enjoy life but never have a chance of owning a house and always say "I could bust my ass, be burnt out for a couple of years, but nahhhh…I'm just going to give a dodgy landlord a huge amount of rent every month for the rest of my life because I don't want to sacrifice my lifestyle for a (relatively) short amount of time in the grand scheme of things to set myself up in the future, maybe someone else will do it for me.
or
b) make buying your own house a priority and make the needed sacrifices to your lifestyle for a (relatively) short amount of time to make that a reality. Maybe for a couple years you won't get to ride your bike very much, you'll be brown-bagging a lunch every day, maybe you're going to be burnt-the-fuck out but whatever, when you're old and sitting on the porch of the house you own (not the one you're paying rent on), you'll probably look back and say "yup, that was worth it".
You're right and I do not think I am in a bad position relative to peers my age. I do try and enjoy my life but I also typically work 40-50 hrs a week, closer to 40 recently as there isn't as much work lately. I drive a 2005 truck. I commute to work every day on my bike, unless I am getting paid mileage to use my truck. Outside of skiing, hockey and biking, I do not spend much money. I concede those three sports are not cheap but I am willing to allocate some money to them each year. I have nice bikes but by no means do they stand out, particularly in these woods where everyone is on [HTML_REMOVED]6k enduro rigs.
I eat at home and cook myself. I always make extras so I don't have to buy lunches. I put away about 30% of my pre-tax income. So yes, I am saving, I am frugal with spending.
However, relative to previous generations, our generation has to work more hours for similar pay. Pay is generally not that high in the lower mainland for younger people, the location our discussion is about. For sure, when oil is back people can go make tons of money for the sacrifice of a few years, but again, not everyone can or will.
As I said previously, at times I wish I had training in a trade so that I could be more valued in smaller towns but for my education and training, work is in the city,
Regarding the example about how you save an extra $30k and the place goes up in price $100k in the meantime - the point isn't that you have to save another $5k for the minimum down payment. The point is that there is no sense in trying to save extra money to make a bigger down payment on a place (ie. something a conservative responsible home buyer would do in a normal housing market) because by the time you've saved the extra money the house has already gone up in price at a much higher rate than you are saving so you are now worse off overall by $70k (which is the extra mortgage you are taking out vs. if you just purchased right away). And this is a big reason why people are panicking and trying to buy a place ASAP, which just fuels the fire overall.
This. I have saved up a decent down payment and I continue to save. It is just the past few years where real estate has increased so dramatically that it seems like I am trying to find the end of the rainbow. Even with saving each year for a down payment, the total mortgage would increase because housing prices have grown so much. For a dramatic example, say I saved 400k for a down payment on a 4 million dollar home. That is 10% but the mortgage is now more than I could realistically earn in my lifetime. Before anyone rags on me, no I am not looking or considering a house like that. My only dream if I live in Vancouver is to now own a townhouse. Detached houses are a dead dream.
You're right and I do not think I am in a bad position relative to peers my age. I do try and enjoy my life but I also typically work 40-50 hrs a week, closer to 40 recently as there isn't as much work lately. I drive a 2005 truck. I commute to work every day on my bike, unless I am getting paid mileage to use my truck. Outside of skiing, hockey and biking, I do not spend much money. I concede those three sports are not cheap but I am willing to allocate some money to them each year. I have nice bikes but by no means do they stand out, particularly in these woods where everyone is on [HTML_REMOVED]6k enduro rigs.
I eat at home and cook myself. I always make extras so I don't have to buy lunches. I put away about 30% of my pre-tax income. So yes, I am saving, I am frugal with spending.
However, relative to previous generations, our generation has to work more hours for similar pay. Pay is generally not that high in the lower mainland for younger people, the location our discussion is about. For sure, when oil is back people can go make tons of money for the sacrifice of a few years, but again, not everyone can or will.
As I said previously, at times I wish I had training in a trade so that I could be more valued in smaller towns but for my education and training, work is in the city,
This. I have saved up a decent down payment and I continue to save. It is just the past few years where real estate has increased so dramatically that it seems like I am trying to find the end of the rainbow. Even with saving each year for a down payment, the total mortgage would increase because housing prices have grown so much. For a dramatic example, say I saved 400k for a down payment on a 4 million dollar home. That is 10% but the mortgage is now more than I could realistically earn in my lifetime. Before anyone rags on me, no I am not looking or considering a house like that. My only dream if I live in Vancouver is to now own a townhouse. Detached houses are a dead dream.
To be fair, our parents and their parents didn't buy detached homes as single occupants. On single salaries, often yes, but both partners played a role in supporting the household. The idea that I can go out and buy a detached home on my own has always been highly unrealistic.
To be fair, our parents and their parents didn't buy detached homes as single occupants. On single salaries, often yes, but both partners played a role in supporting the household. The idea that I can go out and buy a detached home on my own has always been highly unrealistic.
No doubt, and only a select few now would be able to buy a detached home on a single salary. It is accepted that most young couples are dual-income as one income is not generally enough in Vancouver, which is perfectly reasonable.
I guess what I am saying is that it irks me when older people think that the younger generations are privileged. Personally I have worked hard both at school and work to date. Housing to income ratios are higher now than for previous generations which would indicate to me that we would actually have to work harder than previous generations. Every generation has had their struggles but I would argue the Baby Boomers had it best. Relatively war free, and overall excellent economic prosperity.
It is almost comical to think that a couple could get by financially with only one income in the present. As no surprise this a contributing reason why much of the western world, particularly in cities, couples are having children later and in fewer numbers.
I guess what I am saying is that it irks me when older people think that the younger generations are privileged.
It is part of the circle of life.
Never has youth been exposed to such dangers of both perversion and arrest as in our own land and day. Increasing urban life with its temptations, prematurities, sedentary occupations, and passive stimuli just when an active life is most needed, early emancipation and a lessening sense for both duty and discipline, the haste to know and do all befitting man's estate before its time, the mad rush for sudden wealth and the reckless fashions set by its gilded youth-all these lack some of the regulatives they still have in older lands with more conservative conditions.
It is almost comical to think that a couple could get by financially with only one income in the present. As no surprise this a contributing reason why much of the western world, particularly in cities, couples are having children later and in fewer numbers.
It gets even more fun once you've got kids and, until they are in school, a not insignificant amount of one of those incomes goes to paying for daycare.
If Canadian lending practices are to blame for the red hot RE market here in Vancouver why are those same rules not setting RE ablaze across the country? I would say it is the opposite to this and that lack of regulation on foreign investment that is to blame if we are pointing fingers.
I absolutely agree that foreign investment is massive to the situation in Van. But it would be very incorrect to say that Canadian lending practices have not heated up the entire country. I just checked and Saskatoon has gone from a benchmark of $105,543.00 in 2000 to $347,441.00 in 2016. This is a factor of 3.29x in 16 years, which is unprecedented. Vancouver went from $339,990 in Feb 2000 to $1,305,600 in Feb 2016, which is a factor of 3.84x. As you can see it's almost identical. Not liking Saskatoon as an example? Try Halifax. This article claims homes are now unaffordable and driving people 'off the peninsula', and claiming this is in contrast to wages that have not recovered since the GFC. http://www.cbc.ca/news/canada/nova-scotia/housing-market-real-estate-mortgages-1.3511186
This is not just a Canada wide problem, it's a global problem due to expansion of credit driven by low interest rates. The entire world is in a property bubble. This is not a unique view and is well documented. And to play devil's advocate on the foreign investment perspective again; Australia has strict foreign investment laws and has strong penalties including sale of assets http://www.cnbc.com/2016/01/17/australia-forces-sales-of-foreign-owned-properties-after-breach-of-ownership-laws.html
However, this has not stopped them from experiencing the same effects of the global property boom. http://www.globalpropertyguide.com/Pacific/Australia/Price-History
Kram, you seem like a good guy that I would like to rent from so if we can take away anything from this maybe it is that you should offer your tenants some assurance so they don't have to go through the stress of not knowing if they can afford their place in a few months or the shock of a large increase they didn't see coming.
When it's time to renew in a few months I will be offering them a choice of what kind of lease they want. I'm pretty sure since I just dropped the rent this week to help out with their hydro bills that they know they aren't in for a shock. It would be a different situation if this was 5 years ago and I had a separate property and had to charge less than my net expenses, as I back then I would counting on recouping in the future when the market improved. My outlook now is that in the future the rents are likely to not outpace inflation because I doubt anyone will be able to afford to pay it, and I also think the available stock is going to increase over the next 5 years.
Forget the lending practises where Vancouver is concerned mayeb you could figure out what they did to a normal Canadian city BUT I think Vancover has just been too fucked to call for many years, its done nothing but go up in spite of the credit swap crisis, the stock market crash or any kind of downturn or calamity anywhere else in the world, so some of you have never experianced a good rousing RE market downturn
See above for normal Canadian cities, as well as the protected Australian market.
Vancouver has been expensive for years. So has Sydney and New York, but the factors at which property has risen is being mirrored in places you might not expect. It's hard to see how this can go on, but somehow it does. Real estate sure can go down, and even in Squamish this has been the case in recent years for a short period. That's the thing with bubbles, most people just give up and figure this time is different. I think perhaps what we are witnessing now is the bubble has gone on for so long that even the last of the bears are now capitulating and going all in. This could be a sign that it's going to burst soon. But the trouble is there is so much manipulation with interest rates and quantitative easing that they could keep inflating the bubble for a number of years yet.
This is why the rent situation pisses me off so much. I think it is the one area a municipality can do something about fairly easily and yet they didn't and it is a little late now. If rent was still somewhat reasonable it would be easy enough to believe the market will change in time and as long as you sock away money now you will be ready to buy later. But when rent goes up faster than your earnings even saving seems like a pipe dream. Meanwhile rents become another avenue for those that own to increase their wealth.
I do agree it's a fucked up situation. I'm not sure I agree that it's easy for the municipality to do something about it, other than removing road blocks to development. But then, that could cause oversupply if there's a downturn which has very negative effects as well. Back when Crumpit Woods went on sale, I thought that it was irresponsible because there were so many existing homes that had been on the market for in some cases 3 years. When the reality now is that land is too slow to come on the market, despite the dead zone of a half finished subdivision up past Quest sitting idle for 6 years that is now chock full of houses under construction. Things have turned around here on a dime, and it could just as easily turn back the other way again. I don't really know what I think. On one hand, I don't see the migration to Squamish stopping, but I also can't see how the whole global situation is sustainable so I expect it to come crashing down again soon. I'm completely torn as to what I think is going to happen next.
I absolutely agree that foreign investment is massive to the situation in Van. But it would be very incorrect to say that Canadian lending practices have not heated up the entire country. I just checked and Saskatoon has gone from a benchmark of $105,543.00 in 2000 to $347,441.00 in 2016.
I rode the chairlift in Whistler with a couple of guys visiting from Sask a while back. They were bitching about how home prices are going crazy in Saskatoon. (Presumeably from a lower reference point).
The idea that simply putting aside salary to pull together the mortgage down payment is a bit too simplistic now. You've got to be joining the investor-class and turning that nest egg into much more. You can do that in RE by buying in another locale and renting it, or in equities etc.
Just grinding it out with setting $$ aside while you skimp and sacrifice isn't going to cut it when the mortgage values are going up so fast.
Throwing up your hands w/o getting creative on sharing mortgages with friends or family to split your costs is also too simplistic. There's been lots of articles on how you can own fee-simple with friends sharing the space and your having a formal arrangement on the split. Find your angle. It's true that Boomers never needed to be this clever to get in…
NSMBA member.
The idea that simply putting aside salary to pull together the mortgage down payment is a bit too simplistic now. You've got to be joining the investor-class and turning that nest egg into much more. You can do that in RE by buying in another locale and renting it, or in equities etc.
Just grinding it out with setting $$ aside while you skimp and sacrifice isn't going to cut it when the mortgage values are going up so fast.
Throwing up your hands w/o getting creative on sharing mortgages with friends or family to split your costs is also too simplistic. There's been lots of articles on how you can own fee-simple with friends sharing the space and your having a formal arrangement on the split. Find your angle. It's true that Boomers never needed to be this clever to get in…
Not sure if I am reading your post correctly, but are you suggesting:
1) That people need to invest their money prior to making a down payment on a house? Isn't this common sense..? I'm sure the vast majority of people have their future downpayment fund sitting in some sort of investment and not just sitting in a non-interest bearing account.
2) That people should be sharing houses with friends and family to make it more affordable for everyone?
As I said previously, at times I wish I had training in a trade so that I could be more valued in smaller towns but for my education and training, work is in the city,
I certainly didn't mean to put down what you're doing and it sounds like things are working out.
the only thing I can add is that you might be surprised of the demand for educated folk like yourself in small communities if you do decide to get out of vancouver - here in the kootenays, we have a local college that pumps out carpenters, foresters, electricians, welders, machinists, hairdressers and basketweavers (arts school..) etc every year in great numbers. There is alot of competition for jobs in these sectors and as such wages are usually low, job stability not so great.
but the closest school turning out more specialized professionals such as yourself is far away and while there aren't as many jobs in these sectors, there is much less competition. Everyone here is a carpenter, but I only know one engineer…
If you do decide to make a move to a small town somewhere else, the job search procedure is quite a bit different than in big cities so you likely won't find job postings online, but looking through the phone book and calling some consultants in your field of work might reap surprising rewards.
I've met a few professionals over the past few years who relocated from big cities (edmonton, calgary and vancouver) and had a job lined up before they arrived. When I expressed some surprise and asked how they managed to have a job already lined up in an often tough job market, they said all they did was phone and ask a few consultants in their line of work. The three individuals I'm thinking of had to take a pay cut compared to what they were making in the city but all were much happier, and relatively speaking their money went further.
I don't know anyone here who makes $100k a year here, although I'm sure they exist
2) That people should be sharing houses with friends and family to make it more affordable for everyone?
Vancity, and I'm sure other institutions, have special mortgages just for this scenario.
https://www.vancity.com/Mortgages/TypesOfMortgages/MixerMortgage/
I assume the idea is that you buy a house with one or more suites, or a property with a laneway home, and divy up the mortgage based on square footage, or something like that. Seems like a potential disaster if a relationship or friendship goes sideways, but no different than getting divorced from someone whose name is on the mortgage, I suppose.
Vancity, and I'm sure other institutions, have special mortgages just for this scenario.
https://www.vancity.com/Mortgages/TypesOfMortgages/MixerMortgage/
Interesting… as practical as it sounds on one hand, I still don't see how this would work for most people - assuming you have 2X families of 4, and say each family can afford $800k, are you really better off having 8 people in a $1.6M house vs. 4 people in an $800k townhouse?
I know sharing houses between multiple families is common in some cultures but I don't see how this would benefit most people.
The idea that simply putting aside salary to pull together the mortgage down payment is a bit too simplistic now. You've got to be joining the investor-class and turning that nest egg into much more. You can do that in RE by buying in another locale and renting it, or in equities etc.
This is the collateral damage of low interest rates. Saving is not rewarded, so you are forced into stock markets where automated computers are high speed trading and the whole system is rigged. The stock market is in a bubble as a result now too. This is not an accident, since it's even been admitted (I think it was Bernanke) that the intention of ZIRP (0% rates) was to boost the stock market to create a 'wealth effect'. In other words, blow up a bubble in the stock market so that people feel like they are getting ahead so that they will spend to boost the economy. Savings accounts are useless.
Throwing up your hands w/o getting creative on sharing mortgages with friends or family to split your costs is also too simplistic. There's been lots of articles on how you can own fee-simple with friends sharing the space and your having a formal arrangement on the split. Find your angle. It's true that Boomers never needed to be this clever to get in…
Here's the problem with that line of thinking. You're talking about taking historically unheard of measures to get on the merry go round. Other historically unheard of measures are low/no deposits, longer amortizations and lower interest rates and we know how that plays out. Or you can do it like Japan and go for multi-generational mortgages where you leave the debt to your kids, but again we have also seen the carnage there. Then it's only a matter of time before you start looking to your grandkids, or your neighbors grandkids after that. If you have to shack up with your buddy to buy a 2 bed condo, it probably means we are getting close to the end. Of course we are yet to try negative interest rates like Sweden, Denmark, Switzerland, Germany and Japan. I mean seriously, if you have to go to negative rates to support this house of cards, how much longer before it collapses?
Of course the big question is… if we have another GFC, will China think the best thing to do is put their money into Canadian real estate? Hmmmmm. And therein lies the rub. There's so many ways this can be propped up such as foreign panic investing, massive QE, negative rates, govt. incentives, multi-gen mortgages etc. As much as everyone calling for a bubble to pop in 2001 feels pretty sheepish right now, this doesn't mean it's a bad call to say it will eventually crater. But if it takes another decade before it does, maybe it is worth getting your cat to cosign the mortgage documents.
Vancity, and I'm sure other institutions, have special mortgages just for this scenario.
https://www.vancity.com/Mortgages/TypesOfMortgages/MixerMortgage/
I assume the idea is that you buy a house with one or more suites, or a property with a laneway home, and divy up the mortgage based on square footage, or something like that. Seems like a potential disaster if a relationship or friendship goes sideways, but no different than getting divorced from someone whose name is on the mortgage, I suppose.
that's crazy. Vancouver is going down a dark path….
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