HOME OWNERSHIP is NOT a RIGHT! And, a Housing Marketing Crash is not good for any of us. Even if you don’t own a home!!
Phew – it feels good to get that off my chest… you see, I recently read an article by Max Fawcett in the Vancouver Sun talking about the crash of the real estate market. The author was quite gleeful in the fact that finally he (and many others) may finally be able to afford something other than a 500 sq.ft. shoebox condo.
His idea was that Vancouver’s market had gone up for far too long, stating that “The past 15 years have witnessed the longest and largest real estate boom in two generations“. But if you look at the real stats from the Real Estate Board of Greater Vancouver , the average detached home, condo, or townhouse has in fact only really increased over the past 6 years which is a typical cycle in real estate.
This incline has been steep and very dramatic, but if you compare it to the mid 80’s to 1990, prices in that cycle almost TRIPLED!!! In this cycle, prices have basically doubled. Yes, doubling $400,000 is a lot more money than doubling or even tripling $120,000 as was the case in the mid-80’s. But, it’s all relative based on inflation and the value of our dollar.
Vancouver is NOT cheap. Vancouver’s Affordability Index is the worst in the Country at around 60-70% our income (this means that our housing costs – mortgage, property taxes, insurance, etc – make up close to two-thirds of our Gross Income – a stable, balanced market is often noted as around 50%) and our housing values have increased at a very quick pace, but I completely disagree with the attitude that it is “our right to own in Canada”.
Based on all the comments posted after the article, there appears to be a large number of Canadians that are happy about the fact that the market may crash. Why all the animosity? And since when is it our right to own a home? Sure, it’s the ideal, but certainly not a right. Just look to many of the other countries in the world, especially the old countries and cities like London, England, Dublin, Ireland, Berlin, Germany, Shanghai, etc. You just have to look at these countries to see how ridiculously expensive they are. Why should Vancouver be any different? It’s consistently ranked as one of the top places to live IN THE WORLD! (Source: CIBC World Markets Research Study: Consumer Watch Canada March 16, 2007)
If you can’t afford to buy in a city, but you really really feel the need to own, then maybe you have to make some concessions. Move further away from Vancouver, or even move to the interior or the island or try another province! Life is about choices. If your choice is to own your home, and you don’t have the means to do it in your chosen city, maybe its time to move elsewhere or come up with some creative ways of buying.
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