Canadian housing affordability is getting pretty frightening. When I was in Calgary earlier this month and was reading a big article in the Globe and Mail which detailed the crazy prices people are paying for tear downs and non-up to date houses in Toronto and the like. Even a quick search of Calgary realtor sites showed houses smaller and the same age as mine that was listed as more than double what I paid in the Calgary of TX.
I always enjoyed when I was back in Canada, how so many people of my dad’s friends had this holier than thou attitude vs. the US and when the US housing bubble burst they were like “haha stupid americans. That would never happen here.” I’m just waiting patiently for interst rates to rise, which is taking longer than I originally thought.
^ There are profound differences in the two markets though. Calgary’s price increases are an artificial construct of an anti-sprawl City council that refuses to allow more home construction. So we have a serious supply crunch. The rental vacancy rate is <1% in Calgary, so its not like the empty McMansions issue in the US. Vancouver’s prices are driven by Hong Kong and Chinese investors wanting to get their wealth the hell out of China. Whether or not that is long term sustainable we will see.
It won’t happen for a long time. Better chance to see a correction due to a recession.
A good number to look at is first time home buyers. Not sure about the West, but it’s alarming low here. Sellers are being stubborn and rather sit on their home than sell.
That’s a pretty tough multiple of income to have to overcome if you’re buying, particular for a first time buyer without equity built up in a prior home.
I spoke to someone from Vancouver the other day. He was in his late 20s. He told me that the people in his generation will not be owners but renters and he now has come to accept that fact.
I’ve been looking at houses in Vancouver, and everyone says this – “it’s so expensive due to the Chinese driving prices up”. But you know, it doesn’t seem that expensive to me. North American houses are massive (way more space than anyone needs), and there’s stuff in the $300-400K range there. I guess it’s all relative; coming from Seoul where a little box in Gangnam can cost $300K, Vancouver seems like a lot of space for the money.
Heck, I’ll just roll into town like a banger and buy with cash. The incoming Chinese give me downside protection, and hopefully gains.
You do realize if you do what you say, you’re the exact reason real estate prices are so high? Just because its relatively cheap for you means you’re buying up the property that’s perhaps barely affordable to the people that already live and work there.
Of course, that’s how markets work. It’s a desirable city (or perceived to be) and the natives are getting priced out. To the natives I would say “stop being consumers, save your money”. That’s what the Chinese do.
Presumably you don’t consider any of the hedge funds in Connecticut as “good jobs”?
And purealpha, there are no houses in Vancouver for 300k. A few months ago I remember reading an article saying that the cheapest standalone home in Vancouver proper was 600k, and it wasn’t much to look at. You can maybe get a tiny little bachelor suite for the mid 300’s. If you found anything halfway decent for less than 600k I’m guessing you were actually looking at Surrey or Richmond or Coquitlam or something.
I just take issue with the idea that good careers in finance only begin in a handful of cities. Clearly there is a strong concentration of jobs in the financial centers. But from venture capital in Northern California, hedge funds in connecticut and throughout the country, to wealth management wherever rich people live, there are tons of opportunities outside of the major centers. There’s far more opportunities in the big centers, but more competition as well. Tons of the top names in finance didn’t start in NYC.
It’s helpful to be in a hub when you are young and making contacts. After that not mandatory to be located in a hub. At this point I can work remote for people I know anywhere in the world. Visas/housing and such are the tricky part.
Canada has one of the worst “good opportunities to supply of labor” ratio in finance. Tons of of qualified, competent people fighting for a handful of great jobs in this industry. We have very good opportunities for foreigners here but finance isn’t one of those fields.
I’ve heard that before and it does worry me. I try not to put too much weight into anecdotal evidence but I’ve heard that from quite a few people, and it sucks because I have a family and I’m worried about the strain of raising them abroad.