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HomelessinSD
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Re: Vancouver RE has dropped >10% since 2013

Mon Jan 11, 2016 8:07 pm

Standard of living should matter.

Say you make $20k / year and buy a house for $100k. You put 10% down and can make your mortgage payments but there isn't a whole lot left of disposable income. Your job is secure, but salary increases are basically pegged at CPI.

Other than feeling "rich", what difference does it make to your standard of living if the house is now worth $500k if you plan on holding onto it for 30 more years? You don't have any extra income for disposable expenses... Based on your income, you can't really even pull equity out of your home because you can't afford higher mortgage payments.

But now your daughter's favorite fruit is 40% more expensive in the winter because it's grown in California and that spring break trip to San Diego is out of reach due to the added expense.
 
tdma800
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Re: Vancouver RE has dropped >10% since 2013

Mon Jan 11, 2016 9:05 pm

that's an individual decision to not take the tax free money and sell out.
 
VanBullBear
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 8:27 am

Homeless and tdma, I think you're both right and not necessarily disagreeing with each other.

Vancouver RE must be treated like a stock at these prices, I don't think anyone will object to that.
Rich people from around the world, including Canadians, purchase property in this city as an investment vehicle.

However, at the end of the day for people who own and live here like ETB,Vancouver RE is also a home. So if you live in it, you can't exactly treat it like a stock because it's a roof over your family's head.

It's a double edged sword, Vancouver RE is both a home and a stock investment for owners here. The possitive side is that you get all the benefits of a rising stock as well as being able to enjoy it by living in it and if you decide to sell, you cash out big time (tdma's point here). The other side is that if you don't sell your stock when it's high, you risk for it losing value if the stock prices go down (this is a legitimate possibility that many ignore and is a huge factor) and if you decide to cash out, where are you going to live? It's unlikely that you will be able to afford to be in the same or better caliber home in the near future - will you go back to renting? move out?

ETB feels rich, well that's because he is a millionare on paper - he owns a million + on a stock called Vancouver RE. Weather or not he is LIVING rich is another question. Like you guys said, everything is more expensive so at the end of the day if you are not willing to sell, then you will not realize your wealth. In fact, you will live a more difficult life because things cost more and you're paying more on property tax and your stocks are on a volatile market.
 
tdma800
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 8:30 am

Vancouver is okay the way it is. If people chose to not sell, thats their problem. Its a tax free profit if they sell. Its a lot of tax free funds.
 
VanBullBear
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 9:35 am

I think it's only okay for only a small fraction of the population who own homes and are willing to sell, or those who are in the RE industry. Owners who plan to keep their homes and the rest of the population are not so happy.

It's quite apparent that the majority of Vancouverites are frustrated. Unaffordable housing, rental units being destroyed and rebuilt with units that are unaffordable to those that were prevriously living there. Empty neighborhoods, high cost of living, laundered overseas money, closing of schools, exploited tax loops etc...

So no, I wouldn't say Vancouver okay the way it is currently in the long run. But we need these low interest rates and extreme prices right now to keep the economy afloat especialy when the oil is headed below 30.
 
tdma800
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 9:39 am

holding on to it and deferring their property taxes is still better than dumping a their mortgage payments over 30 years into a pension fund that can disappear.
 
westcoastfella
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 9:54 am

Vancouver RE must be treated like a stock at these prices, I don't think anyone will object to that.
Rich people from around the world, including Canadians, purchase property in this city as an investment vehicle.
I would object to that. Your home is fundamentally different from a stock, and you start getting a warped view of RE when you think of them in the same way.
 
VanBullBear
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Re: Vancouver RE has dropped >10% since 2013

Tue Jan 12, 2016 10:11 am

Vancouver RE must be treated like a stock at these prices, I don't think anyone will object to that.
Rich people from around the world, including Canadians, purchase property in this city as an investment vehicle.
I would object to that. Your home is fundamentally different from a stock, and you start getting a warped view of RE when you think of them in the same way.
If you read further down my post, I'm saying Vancouver is both your HOME and it's a stock or rather it must be treated as such. People who want to live in vancouver have to pay to play. If you don't buy, you risk getting priced out. but if you do, you're in risk of correction. I agree with you that it is fundamentally a home, and most of us wish that it will come back down to earth, but the problem is the world is treating it like a stock. So if you want to own a home in vancouver, you have to or rather you are forced to play the Vancouver RE stocks.

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