Vancouver housing market: no logic -

Vancouver housing market: no logic

Internet game, Crack Shack or Mansion?, may be the best indicator of a city’s out-of-control prices


Petr Pospisil, a frustrated Vancouver teacher, and his girlfriend Ola Rugula have scored a viral Internet hit with their homemade game Crack Shack or Mansion? The object of the exercise is to click through a series of house photos and decide if they are North American drug dens that police have seized and shut down, or if they’re Vancouver “mansions,” which is to say a house listed this April at over $1 million. Good luck spotting the difference.

“It’s scary. I couldn’t believe what I was finding,” Pospisil, who has resigned himself to renting, told Vancouver’s Province newspaper. “I have no hope of owning anything for now.” Vancouver’s housing market has roared back. Prices are at, or above, pre-recession levels. There are any number of reasons for this: a mini post-Olympic boom, fears that low mortgage rates will soon disappear and the desire to escape cost increases July 1, when the 12-per-cent HST, the combined federal-provincial sales tax, adds to the price of new homes and real estate fees.

Has the Vancouver market peaked? Good question—one that bores many a Vancouver dinner party, and one that preoccupies such Internet sites. One has brought the roller coaster metaphor to life, showing why Vancouver’s housing market isn’t for the faint of heart or weak of wallet. Back on the ground there are some real life lamentations at the Vancouver Real Estate Anecdote Archive. Not to get too technical, but if you look at the index of the Vancouver housing market, it looks an awful lot like the profile of the North Shore mountains.  There is a steady, rising slope, say from the years 2002 to 2005, which, if it were an elevation map, would correspond to the geographic mountainside location of West Vancouver and North Vancouver, two of the three most expensive areas to live in the Lower Mainland. The other is Vancouver’s west side. The index starts an insanely steep climb, starting in 2006 to the present. Again, if this were a map instead of a chart, you’d be clinging to the peaks of Cypress or Grouse mountains. One miscalculation, and you’ve a long way to fall.

And so it is with Greater Vancouver’s real estate market. People are indeed clinging by their fingernails as they try to meet their mortgage payments. The anecdote archive tells an all-too-typical story of a couple who bought a $1.2 million house with a $700,000 mortgage. The husband was laid off last month and the wife isn’t sure if her job is secure. Others like Pospisil despair of ever getting into the market. Certainly if you have to fall $700,000 into debt, why would you want to?

But in some parts of the Lower Mainland those sorts of mortgages are the price of admission. North Vancouver, the poor cousin of the three highest cost areas, had a benchmark price in March for a typical detached home of $927,122. A similar benchmark or typical house in neighbouring West Vancouver sold for $1,440,747. And in Vancouver’s west side it went for $1,656,986, according to the latest figures from the Greater Vancouver Real Estate Board. True, there was a dip in housing prices in late 2008 and much of 2009, but it was temporary, and relatively minor in nature. It was certainly not the burst housing bubble that many predicted, and still predict, will hit. By rights the housing prices should have peaked, but logic has long since left the market place.

The affordability index for Greater Vancouver looks particularly grim. Family incomes are static but housing costs aren’t. By one measure, the Demographic International Housing Affordability Survey, Vancouver is the most unaffordable city in Canada, and the 15th worst among 100 cities worldwide. Survey co-author, Hugh Pavletich of New Zealand, says ideally housing costs should not exceed three-times the family’s income, meaning an affordability index of three. Anything above 5.1 is ranked in the survey as “severely unaffordable.” Vancouver has an index of 6.6, which Pavletich called “bloody absurd.”

Canadian banks are also concerned, if a little more circumspect. Says RBC in a recent report on the Vancouver market: “Such poor affordability levels represents an element of risk that could weigh heavily on markets when interest rates start rising.”

Certainly Vancouverites have the least wiggle room. Already 68 per cent of their average disposable income is spent on housing costs. That compares to 44 per cent in Toronto, 35 per cent in Calgary and 36 per cent in Montreal. It’s a sure bet, in the wake of the epic housing meltdown in the U.S, that Canadian lenders today are taking a harder look at the finances of wannabe homeowners. But is that enough to prevent a burst bubble if inflation rises and interest rates jump?

The fact that the floor didn’t fall out of house values during the worst of the recession gives some hope that the market isn’t as over hyped as some fear. Most smart buyers are also relying on mortgage helpers. It’s a rare new home that isn’t built without a self-contained rental suite to provide some income. The occasional mom and pop marijuana grow-op isn’t unheard of either. Not quite a crack shack, but still a risky way to pay the bills. Real estate: Vancouver’s gateway drug.


Vancouver housing market: no logic

  1. Actually the Vancouver index is 9.3 But thanks for comin' out

  2. Hi Ken, I've seen the website and recently read another article on the same topic. We all know that Canada did not partake in the lending feast like California, Arizona, and Nevada but some of those 'mansions' resemble many million dollars shacks in those states. Great post, and nice to meet you.

    Jim Adams – CEO
    New Homes Directory .com

    • Boy what a shocker that you work in the RE business. If Canada did not partake in the lending feast then exactly what do you call zero down and 40 year amortization with zero risk to the lender?

  3. The floor didn't fall out because the state placed a trampoline under prices. Prices bounced back up. Hands up, those who think this can continue for ever. I have a beach front condo here in Miami to sell you.

    • Tell me a little bit about the condo in Miami you have for sale. Some good house bargain hunting out that way, not? Just north of Miami would be better, somewhere around St.Augustine…..

      • I'd hold off on that for a few years. The bubble lives on down here.

  4. Vancouverites didn't avoid the housing bubble. They just witness the delay of it. Prepare for house prices to plummet and don't whine when they do. Don't feel sorry for those who bought $750,000 mortgages when they call ill afford to service their debt. A balance will eventually come to Vancouver and many many people will be left in the gutter. They are the greedy and ill informed gamblers. That's reality. The only question is when.

    • I'm not so sure. If I compare the hot housing market in The Netherlands for instance, which has been going on for at least a decade or more, the warnings have been trumpeted alongside, without any changes in sight. I am not sure the housing market will collapse in popular places such as Vancouver and major cities in Europe.

      There is also money to be had coming from old parents dying, freeing up a significant amount of money to be distributed to the house hunting generation.

    • you keep waiting Dan..

      • Another huge confounding factor is drug money. A lot of drug money is being generated, and one of the main places people will put that money is real estate.

    • It's happening summer of 2010…RIGHT NOW :D

  5. Vancouver's housing market has some unique features compared with the rest of Canada. One is that it's an attractive place to live with a lot of in-migration (not that the rest of Canada isn't a nice place to live, but hey…) Another is that it's extremely geographically constrained, which limits the availability of real estate. Rising demand plus limited supply leads to high prices. Comparing Vancouver to housing bubbles in Miami or the southwest US is inapt for this reason. A better comparison would be with New York City, San Francisco, or Seattle. All of those are known as places with high real estate prices as well.

    • Very insightfull comment

    • ".A better comparison would be with New York City, San Francisco, or Seattle. All of those are known as places with high real estate prices as well."

      NYC is down over 15% from peak and house prices are much lower in terms of rents and incomes than Vancouver. San Francisco is down over 40% from peak. Seattle is only 1/2 as expensive as Vancouver, with more good jobs.

      Vancouver isn't different, just a lot more stupid. Its day of reckoning is coming, and soon.

    • "Another is that it's extremely geographically constrained, which limits the availability of real estate."

      Give me a break Atomic Walrus! Have you driven around the lower mainland lately? Sure it is limited by the ocean to the West, but there is still tons and tons of land to the East and North East. You need to get out more often. Also, for those who want to stay closer to the downtown core, they are building up. You can get a lot of units in a high-rise. Ever been to Hong Kong? Tokyo? Osaka? Vancouver has a lot more growing UP it can do.

      I'm so tired of this BS argument – no more land – did you know they were saying the same thing in Los Vegas in 2005 just before their bubble burst? Yeah Los Vegas, desert with mountains to the North.

      Extremely constrained. Bah!

      • How is it not constrained? lets start dt vancouver. now head west and you're in the ocean in five minutes. head north and you hit the mountains. head south you hit the border. head east and the sprawl is already there! There is not a lot of room for expansion there.

    • Population growth in Vancouver is not greater than any other city in Canada. And there is no shortage of supply, the total number of households continues to grow at a greater rate than population, as it has for the last decade at least.

    • miami was an attractive place to live with lot of immigration…. yet it plunged.
      nyc, sf, and seattle all witness significant declines

  6. McLeans is to be commended for illustrating the absurd property prices in Vancouver – but regrettably, in quoting me got it wrong. These comments were made some three years ago and the situation is much worse now.

    The 6th Annual Demographia International Housing Affordability released January this year found that Vancouver is the most severely unaffordable housing market of 272 major urban markets of the Anglo world (UK, USA, Can, Aust, Ire, NZ) at 9.3 times annual household incomes. Housing should not exceed 3.0 times household incomes.

    Further information is available at and on the writers website at Readers will note there is currently good political progress being made in New Zealand in dealing with these unnecessary structural and planning issues.

    Hugh Pavletich
    Co author – Demographia International Housing Affordability Survey
    Performance Urban Planning
    New Zealand

    • Yeah, I am currently living in New Zealand, around Dunedin, and I think the housing market has gone crazy here too!

      I can't quite figure this out. I know that capital gains tax (none) has something to do with the surging house market, but that alone won't account for the surge, imho.

      Perhaps I sould read into it further, perhaps read some of the websites you refer to, but I'm not really an interested buyer into the NZ market at this point, so I may not delve into the topic.

  7. 5% down with unlimited size mortgages? long term loans with 5 year terms? don't know why you think you're special, but your lending is about the same as it was in the US. in fact, Freddie and Fannie only insured 1st mortgages up to 80% of value. your govt is guaranteeing 95% loans? crazy. also, the 5% is often borrowed. you're in a frenzy about home ownership. i'm afraid the ride will have to come to an end.

  8. Atomic Walrus,

    Miami has the everglades to the west and a pond to the east. We also have fields of ghettos that must be avoided like herpes. Do you have several Haiti's in Vancouver? Such a situation pushes up prices quite a bit (in livable areas).

    Take a look at the listings in Van. Up 100% since Jan. Have fun.

  9. Hugh Pavletich, who posted earlier to correct and add information, provides some interesting thoughts on housing markets and its ups and downs.

    I didn't read it all, but what I read is certainly of interest to urban areas, generally speaking.

    Some thoughts to ponder:

    "Because of the general public and media disinterest in local government – the elected representatives and staff quickly become “bored” with infrastructure and feel pretty much “liberated” to expand the bureaucracies and engage in activities that are more “fun”. Fire cracker displays; free (rate payer paid) concerts; meaningless conferences, meetings and seminars; so called marketing and economic development programs; complex, often conflicting and never ending regulatory processes……..the list goes on."


    "There is a world of difference between “management” and “administration”. We need to start seeing “performance based governance and management” within local government."

  10. The situation in Vancouver is becoming extreme, market is overheating. And it's clear that interest rates could rise as early as June. People should really start to think – if someone buys a house with a $700,000 mortgage, even a slight hike in interest rates could have a deep impact on those whose incomes aren't rising fast enough. I believe that balance will be restored, I just hope it won't be too late.

    • especially when they are on floating mortgages. at about 2.5 %

  11. Atomic Walrus, Did you not notice that prices in New York City fell by about 30% so far? Seattles prices are down nearly as much, so how are your comparisons working out now? You might take a look at Hong Kong which is much more constrained than Vancouver and see the massive real estate crashes they've enjoyed in the past. But yeah I get it it's "different here" right?

    • Yes, they've fallen. That's because the US economy is in serious trouble at the moment. That's not the case for Canada's economy. However, I think you'd also notice that the PRICE of homes in New York or San Francisco are still on the same order as Vancouver. Vancouver housing prices are still not bad compared to other major cities. That is not to say that Vancouver is immune to market variations, but that it's not unreasonable to expect that it's going to be a very expensive market in the long run.

      • The house prices fell first, then the economy went into a tailspin. It can happen here, too.

        Mark Carney even says that a large part of what pulled our economy through the recession was the housing sector — all those people doing renos to get their tax credit, and flipping houses with massive leverage. Once we have to deal with having pulled all that demand forward, house prices will fall, and once they start to fall a bit, that construction/sales activity will dry up, and that will put us into a recession, which will further affect home prices in a vicious cycle…

  12. I always find it odd that some people are so bitter about the housing situation in Vancouver, hoping and praying that the market will crash so that they can sit on the sidelines and laugh.

    Look, we are sorry you aren't able to afford a house in Vancouver. There are people in cities all over the world that can't afford to own there, so deal with it and move on.

    Sitting and bitching, waiting for a crash that won't come isn't going to do you any good. Yeah the prices may drop by 5% or 10% at some point, but so what – they've already gone up by 20% this year and continue to climb. Even if they do drop in the next year or two it's highly likely that the new lower prices will still be higher than they are today.

    • If a loaf of wonder bread is $250 it's overpriced regardless of an individuals ability to afford it.

    • Jack,

      Look around the world (Thailand, Mexico, France, Dubai, etc…) for other places where normal people can't afford to live and you'll see increased crime and street violence combined with economic and political instability. You can't have your cake and eat it too. Are you ready for Red-Shirts, serious gangs, riots, kidnappings, private guards escorting kids to school, and cartels in Vancouver? There are cities all over the world that have proven this reality and outcome. Sitting and bitching in ignorance in of this age-old reality won't do you (or your children) any good. Letting them eat cake didn't help Marie.

  13. Jack NoSourGrapes: Well Jack, i teach the kids of homeowners in Burnaby, a place where i cannot buy a SFH to raise my own family. I'm hardly asking for the world am I? Live 15km from the downtown! What will these people do when us "sour grapes" types say fuck you and move elsewhere. Who will serve the landed gentry their frappuccinos and their yoga pants?

  14. OK what i was trying to say before the Nanny State deleted my comment was what are the Jack NoSourGrapes type going to do when the people that serve the landed gentry their frappuccinos just give up and leave. Yes, i realise there will always be a supply of service workers, but his "sour grapes" reference made me think of Maria Antionette's "Let them eat cake!"

    Careful Jack, those plebes may just rise up and bite!

  15. Vancouver has become a money dump for international people looking for a place to "park" their cash & hope for good returns. To discourage ownership by non-Canadians AND non full-time residents property taxes for those people should be at least 10 times the normal rate that Canadian residents pay. This extra tax revenue should be used to fund affordable housing for low and medium income Vancouverites. This is not a new idea, Florida taxes out-of-town owners at much higher rate than residents. It's been done in Europe as well.

  16. As well as PEI & NS. I don't know, however, what the percentage difference is.

  17. You have to love life in the Maritimes (the other coast). You can live on a small acreage with a modest bungalow and RETIRE here for the price of a benchmark house in West Vancouver. Sure, if you work you won't make as much but you won't need as much either.

    What will happen to the holders of these million dollar mortgages when interest rates go back up to historical norms? Think of Calgary and the dollar dealers back in the early 1980s. You had to give a house away to get rid of it.

    Try moving way east, it's a lifestyle decision and you will sleep soundly at night.

    • Why do you want those Vancouverites coming and raising your prices?

      • Not really. But hey, if they want to come and spread a bit of the wealth, I'm sure there are people down here that would welcome them with open arms….and bank accounts.

  18. I think the real question everybody should ask is: what are the fundamentals, and do they justify housing prices as high as they are. What long-term factors determine the demand for houses? Presumably population growth and economic growth are the big ones. Do those numbers justify what is happening in Vancouver? If not, you probably have a lot of people buying insanely expensive houses with the expectation that those houses will increase in value, perhaps significantly, in the near future.

    There are some reasons to expect real estate to be expensive in Vancouver – namely immigration and climate. Moreover, Canada doesn't have the policies that artificially inflate the real estate market. They have mortgage interest deductibility and tax credits for first time home-buyers down here, which encourage people to invest more in real estate (which is a horrible thing – it inflates the price of houses, and takes investment dollars away from companies that conduct research and contribute to a long-term improvement in our economic well-being).

  19. It's fair to say there's a risk of a bubble, at least (I personally think it IS a bubble rather than the mere risk of one, but whatever).

    So the second question is, are the BC, Vancouver and area or federal governments doing anything policywise to prepare for the tax issues, the capitalization issues, the mortgage foreclosure issues, for when it inevitably pops? Or are they going to be as blind and surprised as the Americans, two full years after the Americans taught us to keep our eyes open?

    • Yeah, and all the greedy pigs who get creamed when this thing blows up will be screaming for a government bailout. Just wait.

  20. Yes. Long ago I learned when I don't understand it, don't invest in it. That simple logic has served me well in avoiding the madness of the dot com booms and the it's what has kept me out of the Vancouver real estate market.

    Bottom line, Vancouver and Windsor have approximately the same levels of median household income. In Windsor you can buy a 4000sqft house for 250k, in Vancouver that house would cost 3-4million (maybe more). Not to say Windsor is as nice as Vancouver (clearly it is not) but this isn't about niceness, or beauty, or mountains. It's about MONEY.

    Housing costs 9.8 times annual gross income now? Sorry, but that is ABSURD!!! Anyone who thinks these prices can be maintained are dreaming. To me it seems like the Canadian banks are just peddling these mortgages out because the CMHC will just insure them all. It's not the exact same blueprint as the US crisis (Mortgage originator -> investment bank CDO buys it and assumes risk -> rating agency AAA rating -> sold to CDO fund to risk averse investor who ends up taking the risk and holding the bag), but quite similar (Canadian bank originator takes the risk -> insurance from government CMHC, who effectively assumes all the risk). In both cases, the guys making the loans didn't really give a damn about the quality of the loan, because the risk of default was always peddled off to someone else. In the US case, to some poor schmuck in Germany or Japan who thought they were buying some AAA paper. In Canada, to the stupid taxpayer who will insure anything.

    This will NOT end well.

  21. Oh and another thing, the immutable law or real estate rent and buying prices: Buy when the ratio is 10, sell when the ratio is 20.

    What's it in Vancouver? 25? 30? 35 in some neighborhoods? What those numbers tell you is people are buying not based on yield, but based on pure capital appreciation. You know why the US credit crisis started? Because Moody's, S&P, and Fitch all didn't take into account the possibility of a decline in housing prices into their models.

    Clearly, Canadians aren't taking that into account either, otherwise they would NEVER buy a place for 500k that they could only rent for $1400, that is crazy insane from a pure dollars and cents point of view. Unless real estate prices always go UP UP UP, BUY NOW or your miss out forever, etc.

    • That's an excellent point about rental yields vs. capital appreciation. I see it happening first-hand in Vancouver. Nobody really talks about rental yield. It's like in the dotcom boom, when everybody forgot about these things called "dividends". Remember how that ended?

  22. Many thanks to the author for mention of our website, the Vancouver Real Estate Anecdote Archive.
    We aim to document the impact of the Vancouver RE Boom (and the inevitable coming Bust) on individuals, families and our society, by archiving personal anecdotes regarding the RE market.
    We invite you to visit the site, and to submit an illustrative story if you have one.

    (vancouver real estate anecdote archivist)

  23. There may be no logic, but here's a fun way to experience the history of house prices in Vancouver: As a roller coaster!

    This isn't the first time there's been a housing bubble in Vancouver.

  24. My wife and I live in Vancouver and earn $160K+ combined. I believe this puts in the top 5% of Canadian incomes. And, as top 5% earners, we can't afford to buy a house in the city in which we live. Does this make any sense? About as much as it does that realtors in Vancouver are making $30K+ in commissions on their sales of each "avg" house, I guess.

    This market is grossly out of alignment.

    It's being held together by easy to obtain mortagages, cheap interest, undeclared basement suite income and grow-ops. And all those who should be regulating any of it, are simply looking the other way. Afterall, why wouldn't they, when their own homes are going up $100K in value/year?

    The 'normal' long term trend price of a home in Vancouver is around $550K. Almost half what it is currently. If this bubble of easy & illegal money ever does pop, expect a 30-50% drop in home prices.

  25. None of these homes are "single family". My "south asian" co-worker just custom built his home in east vancouver and he has around 15 people living in it. He tells me that the whole block is like that, darn near impossible to find parking. Imaging 15 people financing a home, drives prices up. The city should raid these homes and make them pay extra property taxes or kick out half the people living in it.

  26. If you kick out half the people, they will increase the burden in the house market. This only helps increase the house prices! Don't you understand? It is not the problem of the many people who help finance a house, it is the problem of the provincial and municipal governments that have high deficit! They need high tax incomes. They will tight the supply in order to get more taxes. This is the bottom line.

  27. Vancouver is repetitively voted one of the top 3 cities in the world to live in, and people with high net worth both flock here and do business here. In addition, we have some of the best university programs on the planet in medical technology, which drives students from other countries here.

    The result of this is increasing home prices. I agree the market is grossly out of alignment, but with that level supply and demand going on, its not about to slow down in my estimation.

    Investors then buy up property as they know all too well that they will be able to resell.

    It is the average homebuyer that needs to live in the Greater Vancouver area that really gets hit.

    • Businesses flocking to Vancouver? This is news to me. I know many tech companies like EA sports have left Vancouver have left Vancouver because of the high taxes/costs of doing business there. Wages are the Canadian average in Vancouver and NO more. Don't try telling me businesses are flocking to Vancouver, it is infact the exact opposite.
      Where is your evidence of this?

      • i agree with mat – there are NO businesses flocking to Vancouver, and our schools are OK at best. I grew up here in Vancouver, went to university here – it's OK. People – ASIANs flock here cos there is a huge Asian population – that's all there is to it. the rest of us were born/raised here and want to stay but are being forced out of our own town!!!

  28. The bottom line is that wages have remained flat while housing prices have skyrocketed. Vancouver has no middle-class. Jason's mistake is to think that the people you "kick out" have to stay in Canada, let along the GVRD. He sounds like someone who has never traveled. Take a serious look at global options, climate and affordability, then explain why people should choose to stay in rainy over-priced Vancouver. Because it's "the best place in the world"? Right… That's like those people from Regina who try so hard to convince me that their hometown is a wonderful place to live.

    I think Decker and Meany are headed in the right direction with their comments above. Why not increase property taxes 10 times, (as in from 4k to 40k a year) and eliminate or significantly reduce income tax? While we're at it let's tax inheritance over $1M. Anyone with a real job will support this. Don't forget that the Drug Dealers, Arms Dealers, Trophy Wives, Foreign Princes, Old Money, Geriatrics, Politicians and Foreign Land-Owners pay virtually no income tax, and have the Politicians in their pocket. Vancouver has become Canada's Monaco and the land-owning Boomers who choose to stay here will need to get used to the fact that the person who changes their bed pan will not speak English. IMHO the Canadian Boomers have knowingly exploited and destroyed the planet, and have sold their children and grandchildren into economic slavery. I am not proud of Canada, and am raising my children to move elsewhere to find opportunity. As I see it the Boomers deserve to lose their homes, culture and children to the foreign interests they accommodate. This is already well underway and will be the Boomers' legacy.

  29. Absolutely, that is another big factor – our banking system stayed fairly strong throughout the recession and was somewhat better protected against the problems in the US.

  30. What most people simply don't understand is that Vancouver is CHEAP compared to many cities in Europe,
    Asia and the USA. What you locals thinks is expensive at $790,000 for a 3 bedroom is INSANELY CHEAP
    compared to the 4 million dollars that would be paid in New York or London for the same 3 bedroom.

    Ergo, a hell of a lot of rich foreigners will CONTINUE to buy here at prices that are insane-to-locals but cheap to them
    and you locals will have to bear what usually happens in such situations…..You'll be priced out of the market! PERIOD.
    And for the comment of of all those service-clas people just picking up and leaving….that'll never happen because
    there's way too many people who are willing to work a whole lot cheaper than YOU because to them, living 12 to a room
    and working 8 bucks an hour is HEAVEN compared to where they came from.

    You either adapt or MOVE…or become better educated, or become an entrepreneur that has the financial ABILITY
    to afford a house in the Vancouver area. LIFE IS NOT FAIR! Not all people are EQUAL! Some are smarter and more
    hard working than others! I got to my level by working hard, taking risks and never stop believing in myself…and if you
    can't do that…well that's not really my problem, is it?

    There's no fate but what you make! If you continue to THINK like a poor person, then you will always BE a poor person!

    Stop whining and get off your sorry butts and make somethng of yourselves!
    I came from literally living in a cave to high status and I just can't understand
    why YOU can't do the same…I just don't have any sympathies for people who
    keep whining about their plight when many in MUCH WORSE SHAPE came
    from MUCH WORSE backgrounds to MAKE IT BIG — I DID!!!! Why Can't you?

    • you sounded just like my friend the hotshot RE agent. "MAKING IT BIG"? Yeah, I've heard that from him more than a dozen times. As his friend and accountant, I know I will be there during his bankruptcy filing. :)

    • You're not seriously comparing Vancouver, CA to NYC or London with regards to population size, economy size and growth or importance on the worlds financial or economic scale are you? And the article indicates several times that prices pre square foot are actually HIGHER in Vancouver the NYC! But don't worry your market won't crash, it's different up there.
      I heard the EXACT same argument about geographic land constraints ( Airforce base and government land to the north, national parks to the west, lake Mead to the east and hills to the south) , foreign buyers and their associated huge capital investments and a large diversified tax free economy supported by a never ending stream of tourists and gamblers in a place called Las Vegas, have you seen their house prices recently?

    • Only in Vancouver is owning an over-priced piece of real estate crap "mak(ing) somethng (sic) of yourselves!"

      "There's no fate but what you make!" Wow… Thanks for that bit of deep philosophy from Terminator II…

      Typical Vancouver delusion.

  31. Dan,
    You must be really thinking with your bud.

  32. The thing with London being expensive is that it's mainly confined to the City core. You can find affordable three-bedroom housing about 3-4 miles out of the city for around $600,000. You also have to remember that salaries are high and London is a financial hub like New York, something which Vancouver isn't. The financial district in Vancouver isn't even 1/1000 of London's financial district.

  33. actually, Dan is right on the money. It's just that so many people in Vancouver who were born here can't understand this fact of life. It's kind of like the hobbits who are frightened of the big people's world. Guess what, they found you here, and now they are taking over, sorry, have taken over your town. Don't like it ? How about moving to Abbotsford with the rest of the losers who could not make their stake here. That's what you get for a generation of hippie dopers raising the current generation of local woosies!!
    It's a dog eat dog world – get used to it!

  34. OMG! can not believe people are comparing Vancouver to world class cities like London and NYC.

    In cities like NY and London salaries are very high due to them being financial hubs and also head office cities. Vancouver is not a head office city nor does it have a stock exchange or any financial district to talk of. In the former cities 6 figure jobs are plentiful. Besides, such cities have a range of housing for different income levels. London and NY also have excellent subway systems which allow for convenient commuting. I know guys working in NY who chose not to pay Manhattan rents and instead opt to live in NJ and take a train to work everyday.

    Even second tier cities like Seattle are way ahead of Vancouver. Seattle has a lot of juicy head office jobs considering that it is home to Starbucks, Boeing, Microsoft, and Costco. House prices are lower in Seattle. Also seattle has a whole range of pricing depending on the neighbourhood you chose. In Vancouver, even undesirable neighbourhoods like north Surrey will still cost you north of $400k for a house.

    Foreigners have a lot of other cheaper options. Cities in the sunbelt like Phoenix are offering very enticing deals. Atlanta has suburban houses for $100k yet it is head office city home to giants like Home Depot and Coca Cola. Atlanta is an olympic city – yes, they hosted real olympics (summer olympics) and not wannabe winter olympics. The US has a lot of cities with way better weather than Vancouver.

  35. I have many friends who are real estate agents, and they will tell you what is really happening to the market. The reason why housing prices in Vancouver are so high and did not fall is because of the influx of money from China. The nouveaux chinese rich are buying up houses at above market values like they were hot cakes. There is also now a new law passed in China, that each person can only own one house there. So what do they do, they buy up every single piece of property in Vancouver. For this reason housing prices are going to continue their unreasonable climb here in our beautiful city. It is really too bad that our government can't put restrictions on these overseas vultures to stop them from ruining our housing market.

    • Funny how the Canadian Government restricts who can own a newspaper, airline, radio or TV Station, but for one of life's real essentials – housing, any foreigner with Cash and/or credit can use homes in our country as a tool for speculation.

      We need a debate in the country on this issue.

    • If I remember right, in Sydney, Australia there is a restriction on homebuyers: Foreigners are not allowed to buy homes that have been previously owned. They can only buy new-built houses and condos. This regulation was created precisely to avoid the 'Vancouverization' of their city. Good idea.

  36. when this game of musical chairs ends there will be tears. off shore investments are great until property prices drop then as fast as the money flowed in it will disappear, think dubai. not only will the average vancouverite be left holding a massive mortgage for a house thats significantly less but the government deficit will go through the roof and that means two things: a huge tax increase or massive cutbacks. this isn't the US where you can drop your house keys off at the bank and walk away. 68% of disposable income spent on housing in vancouver and the musics about to stop.

  37. The market will not crash…you think the Bank of Canada doesn't know what will happen if they raise the interest rates to 1980's levels? They have more PhD's working on this stuff than you can think of working out every single possible outcome. Why do you think they kept rates where they are? Do you see many foreclosures in Vancouver? No, the prices have plateaued for a reason. The market is near it's peak and will stay that way until incomes increase. The US market crashed due to poor policy that was exploited by mortgage brokers with poor credentials. Canadian policy is better protected.

  38. I have a degree

    I have one too and so do many economists who used to work for Lehman Brothers and Bear Stearns. "Smart" people who I presume should have known better when they purchased complex financial derivatives that were difficult if not impossible to value. It doesn't matter what degree you have! Greed overpowers reason. It's inherent in our nature as human beings living in a free market society. My wife and I, both in our mid-30's (no kids yet) make 200K combined and live in a 450K home. I have the sense to live within my means as do other high income earners. Don't think we will prop up your market. I'm just glad that I can live to live through the financial meltdown and learn from the mistakes of the past so that when we do start a family, I can teach my children the lessons learned.

  39. Vancouver – I live here, and I can tell you one thing – the general "consensus" – whether true or not – is that it's the influx of RICH Asian families that has kept the housing prices artificially high. Those of us who live here, well, you heard it – have to mortgage ourselves beyond comfort levels just to afford a home.

    In China, province Shen Zhen for example, the average professional husband/wife must spend 100 years to pay for a home if they choose to purchase a home – doesn't include food, heat, taxes etc. Is Vancouver becoming an miniature version of China? The average person can't afford a house there – the average person can't afford a house here either – unless they got in before the prices went crazy. I remember about 7 or 8 years ago prices were quite low – and recently have jumped astronomically – even in the suburbs.

    Those who want to cry "racism" – go right ahead – doesn't change the facts – this is about what the driving force is behind high housing prices. Our immigration policies need to change and start letting in a more balanced cross-section of individuals from MANY countries – some rich, but mostly middle class – just like Canada. So that things like this do not happen! Who in their right mind wants a 700K mortgage???

    • Read my reply to Sandie above.