> Yes, but having the right policy changes can strengthen market integrity and competitiveness.
IMO, I don't believe that there is enough "political will" in current .gov's to end the "Vancouver R/E game".
BC premier Clark introduced some new rules to curtail the practice of using contract assignments aka "shadow flipping", the Feds tightened the rules regarding down payment amounts slightly, city council IS working on solutions, however they are coming online far to slowly to have much of an impact on the current market conditions, all in all, our governments are taking enough action to give the appearance that they are not doing sweet FA
If you want to be open minded and look at the other side of the RE coin, our governments are doing a BANG UP job of "protecting the home owners equity". The average SFD home in the city of Vancouver increased in value from approx. 1.3 M to approx. 1.8 M during 2015. That 1 year 500K increase in value is about 10x what the average Vancouver salary is. Now if you are a Vancouver homeowner, that is a pretty freaking amazing gain! Do you think it's sustainable? Me either, so now you are presented with the Vancouver Conundrum - IF you want to reap the rewards, your going to have to cash out of the game.
Like all markets, at some point, there will be a correction.
When that correction arrives and the severity of that correction, well, that's anybody's guess. Personally I would think that when Vancouver RE stops offering double digit annual returns on investment, I would think a sizeable chunk of those "investing" in the Vancouver market will be heading for the exits.
And when they do, unless the sellers can continue to find the "greater fool" in the investor pool, things could get ugly!
The median household income in the city is about 74K, which will get you a mortgage in the ballpark of 335k at todays historically low interest rates.
When your selling into a market where people are buying houses to "live" in VERSUS buying houses to "invest" in ( because the prices are appreciating as rapidly as they have been ), the amount of money that the houses in that market will sell for has to be grounded in some kind of economic reality.
If you look at the Canadian real estate market as a whole at the end of 2015. Median household income of Canadians was around 76K, the average selling price of a SFD home in Canada was 503K. Seems a little high given the aforementioned mortgage estimations. However, if you take the Vancouver and Toronto markets out of the picture, you wanna guess what the average price of a SFD home was across Canada - yep 335K - aka economic reality.
Vancouver is a very nice city BUT its not quite as special as some would like you to believe that it is.
Currently the only thing you can purchase in Vancouver for that kind of money is a house boat.
At current price levels, holding investment property for it's rental returns doesn't make economic sense.
ID: 5045
NAME: vancouver-housing-where-it-is-headed
DESCRIPTION: ] by Don Sagrott, founder@sospep.com - why our governments are NOT doing much to address the affordability crisis in the Vancouver RE market and what the results will be down the line
AUTHOR: article.author/s
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STATUS: Write
PRIORITY: -5
OWNER ID: 75