adventures in the vancouver housing market
Sep. 1st, 2016 12:00 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
tl;dr: everything is expensive and terrible.
We've not been wholly happy with our current place since we moved in two years ago. I usually describe it as "there are enough stupid little things that it's obviously not a Forever House." Stuff like the bedroom baseboard heater being positioned just wrong to use my bedside table, or the dining area that's barely too narrow to fit chairs around the table comfortably, or the awful track lighting in the kitchen. Or the stupid %&$ stove, which has two settings: not quite hot enough and HA HA EVERYTHING YOU COOK IS TURNING BLACK AND SMOKING. "Stupid %&$ stove" is our go-to complaint whenever anything goes wrong in the apartment.
There's also the noise from the trains stopping and starting all night long, echoing up thirty stories because there's nothing to block or baffle the sound. The trains don't run during the day, at least. Instead there's piledriving for the new towers that are going in just the other side of the tracks.
And the location is less than ideal. It turns out that "right on top of a Skytrain station" is not as awesome as I had thought, at least not when that Skytrain station itself is half an hour from most places that I want to be. That plus the 45-60 minute commute (45 in the morning, 60 in the afternoon), and the thirty-story elevator ride plus the wait for the insufficient supply of elevators means I'm getting much much less exercise than previous. Which does not make me happy either.
We briefly considered buying a place two years ago, but at that point we were on one income, so our options were limited. There was a new "affordable" building going up in Chinatown and we poked around the model unit... and decided that it was not for us, for a variety of reasons. (The oven that was too small to hold a turkey was not the least of those.)
Under normal circumstances I'd be perfectly happy as a long-term renter. I appreciate the freedom to call someone else and say "fix the leaking sink", I think that locking up tens of thousands of dollars in a down payment rather than an actual interest-bearing investment is a foolish waste of money, and quite frankly renting has been cheaper than buying until very recently. Buying a condo means dealing with a strata (condo association), which means trying to convince dozens of people that yes, it's a good idea to spend money on basic preventative maintenance. And Canada doesn't even have a mortgage-interest deduction on taxes.
(Do not tell me "oh but your house is an investment!" If your house is an investment, you are doing either housing or investing, or more likely both, very very wrong.)
But as a renter, there is nothing to be found.
We've been looking for somewhere to move to for nearly a year. Literally nearly a year: I went to see a place back in October. (Perfect location and very nice, but too small. Despite that I'm kicking myself for letting it go.) We've had no luck.
We have two calm, well-behaved cats; Vancouver rentals are obscenely pet-unfriendly, to the point that I want to go to showings listed as "no pets sorry :)" just so I can punch the landlord in the mouth. We need enough wall-space for bookcases; Vancouver hi-rises (i.e, much of the rental stock) tend to have big whole-wall windows, open floorplans, and baseboard heaters, none of which are conducive to a library. We are admittedly somewhat cheap, and picky about location. But in the space of nearly a year trawling Craigslist we've only seen a couple of dozen places come up that we'd even consider going to take a look at.
It's not just us. The Vancouver rental market is dire. The last reports I can find put the rental vacancy rate at around half a percent, and much of that is in efficiencies (bachelor suites) and one-bedrooms. AirBnB is partly to blame, as it's easier to rent a place every weekend than deal with a long-term tenant, for the same amount of money; there's also the fact that there simply isn't housing supply available.
If we want to live in a place where we actively want to live, instead of just accepting wherever we end up, we're gonna have to buy it. On the bright side it looks like, leaving the down payment issue aside, there's a good chance that the ideal place will be cheaper to buy than it would be to rent. This is in marked contrast to the last few years. And as an additional minor advantage, if we own rather than rent we can't be turfed out on short notice when the owner decides to sell.
Update: Circumstantial evidence that it would be cheaper to buy than rent: as I write this a unit that's identical to our current rental, in the same building eight floors down, is listed for just under $600,000 and will likely sell for more. There are multiple desirable purchaseable options available to us at $600,000; there's been nothing available to rent for less than $2500/month.
So we've started looking into the real estate market. And don't we wish we hadn't.
The federal government has a first-time homebuyers' program, for which we qualify. If your first home costs less than $475,000, you don't have to pay the roughly $7,500 in title transfer tax. We are unlikely to be able to take advantage of this program.
For context, the average selling price of a detached single-family home in the GVRD[*] is $1.6 million.
For reasons that no one fully understands, lower mainland[*] real estate prices have gone up by 30% in the last year. There's been something called "shadow flipping," where unscrupulous real estate agents sell a property to a middleman and then to the intended buyer, collecting twice the commission. There's a great deal of foreign money sloshing around because Canada has incredibly lax restrictions on foreign real estate ownership and rich people under repressive regimes (China, Russia) want to keep their money out of reach of their government. And we have a shortage of housing in general, and affordable non-luxury housing in particular, because there is literally only so much land: mountains to the north, ocean to the west, US to the south.
[*] "Metro Vancouver" or "The Greater Vancouver regional district" or "The GVRD" is generally understood to be Vancouver and the surrounding small cities and suburbs, an area a little larger than the DC beltway. "The lower mainland" is the part of British Columbia that has people in it ("lower") and is not Vancouver Island ("mainland").
Things are, in fits and starts, improving, or at least getting no worse. New regulations were put in place to restrict shadow flipping earlier this year. In mid-July, the BC government decided that they needed to look like they were doing something about the housing problem, and abruptly announced that they were imposing a 15% tax on real estate purchases by people who weren't citizens or permanent residents, as of 1 August. This caused the market to accelerate madly at the end of July and then stutter quite a bit this month. On the other hand, I've started seeing listings advertising a 15% discount to foreign buyers, so there's that.
Last week there were pretty much no places on the market that we would even consider. The situation has improved somewhat; we're going to a few open houses on Sunday and a couple more plausible listings have popped up too.
Other good things: We're both employed, with no kids, so we don't have to worry about schools. We have amazing credit and some savings. And we're able to take advantage of what's referred to as "intergenerational wealth transfer", i.e., hitting up our parents to help with a down payment.
So it's not as bad as it would have been had I written this post last week like I'd been threatening. But it's still not good, and I'm not terribly optimistic. Ask me again after we see the places on Sunday.
We've not been wholly happy with our current place since we moved in two years ago. I usually describe it as "there are enough stupid little things that it's obviously not a Forever House." Stuff like the bedroom baseboard heater being positioned just wrong to use my bedside table, or the dining area that's barely too narrow to fit chairs around the table comfortably, or the awful track lighting in the kitchen. Or the stupid %&$ stove, which has two settings: not quite hot enough and HA HA EVERYTHING YOU COOK IS TURNING BLACK AND SMOKING. "Stupid %&$ stove" is our go-to complaint whenever anything goes wrong in the apartment.
There's also the noise from the trains stopping and starting all night long, echoing up thirty stories because there's nothing to block or baffle the sound. The trains don't run during the day, at least. Instead there's piledriving for the new towers that are going in just the other side of the tracks.
And the location is less than ideal. It turns out that "right on top of a Skytrain station" is not as awesome as I had thought, at least not when that Skytrain station itself is half an hour from most places that I want to be. That plus the 45-60 minute commute (45 in the morning, 60 in the afternoon), and the thirty-story elevator ride plus the wait for the insufficient supply of elevators means I'm getting much much less exercise than previous. Which does not make me happy either.
We briefly considered buying a place two years ago, but at that point we were on one income, so our options were limited. There was a new "affordable" building going up in Chinatown and we poked around the model unit... and decided that it was not for us, for a variety of reasons. (The oven that was too small to hold a turkey was not the least of those.)
Under normal circumstances I'd be perfectly happy as a long-term renter. I appreciate the freedom to call someone else and say "fix the leaking sink", I think that locking up tens of thousands of dollars in a down payment rather than an actual interest-bearing investment is a foolish waste of money, and quite frankly renting has been cheaper than buying until very recently. Buying a condo means dealing with a strata (condo association), which means trying to convince dozens of people that yes, it's a good idea to spend money on basic preventative maintenance. And Canada doesn't even have a mortgage-interest deduction on taxes.
(Do not tell me "oh but your house is an investment!" If your house is an investment, you are doing either housing or investing, or more likely both, very very wrong.)
But as a renter, there is nothing to be found.
We've been looking for somewhere to move to for nearly a year. Literally nearly a year: I went to see a place back in October. (Perfect location and very nice, but too small. Despite that I'm kicking myself for letting it go.) We've had no luck.
We have two calm, well-behaved cats; Vancouver rentals are obscenely pet-unfriendly, to the point that I want to go to showings listed as "no pets sorry :)" just so I can punch the landlord in the mouth. We need enough wall-space for bookcases; Vancouver hi-rises (i.e, much of the rental stock) tend to have big whole-wall windows, open floorplans, and baseboard heaters, none of which are conducive to a library. We are admittedly somewhat cheap, and picky about location. But in the space of nearly a year trawling Craigslist we've only seen a couple of dozen places come up that we'd even consider going to take a look at.
It's not just us. The Vancouver rental market is dire. The last reports I can find put the rental vacancy rate at around half a percent, and much of that is in efficiencies (bachelor suites) and one-bedrooms. AirBnB is partly to blame, as it's easier to rent a place every weekend than deal with a long-term tenant, for the same amount of money; there's also the fact that there simply isn't housing supply available.
If we want to live in a place where we actively want to live, instead of just accepting wherever we end up, we're gonna have to buy it. On the bright side it looks like, leaving the down payment issue aside, there's a good chance that the ideal place will be cheaper to buy than it would be to rent. This is in marked contrast to the last few years. And as an additional minor advantage, if we own rather than rent we can't be turfed out on short notice when the owner decides to sell.
Update: Circumstantial evidence that it would be cheaper to buy than rent: as I write this a unit that's identical to our current rental, in the same building eight floors down, is listed for just under $600,000 and will likely sell for more. There are multiple desirable purchaseable options available to us at $600,000; there's been nothing available to rent for less than $2500/month.
So we've started looking into the real estate market. And don't we wish we hadn't.
The federal government has a first-time homebuyers' program, for which we qualify. If your first home costs less than $475,000, you don't have to pay the roughly $7,500 in title transfer tax. We are unlikely to be able to take advantage of this program.
For context, the average selling price of a detached single-family home in the GVRD[*] is $1.6 million.
For reasons that no one fully understands, lower mainland[*] real estate prices have gone up by 30% in the last year. There's been something called "shadow flipping," where unscrupulous real estate agents sell a property to a middleman and then to the intended buyer, collecting twice the commission. There's a great deal of foreign money sloshing around because Canada has incredibly lax restrictions on foreign real estate ownership and rich people under repressive regimes (China, Russia) want to keep their money out of reach of their government. And we have a shortage of housing in general, and affordable non-luxury housing in particular, because there is literally only so much land: mountains to the north, ocean to the west, US to the south.
[*] "Metro Vancouver" or "The Greater Vancouver regional district" or "The GVRD" is generally understood to be Vancouver and the surrounding small cities and suburbs, an area a little larger than the DC beltway. "The lower mainland" is the part of British Columbia that has people in it ("lower") and is not Vancouver Island ("mainland").
Things are, in fits and starts, improving, or at least getting no worse. New regulations were put in place to restrict shadow flipping earlier this year. In mid-July, the BC government decided that they needed to look like they were doing something about the housing problem, and abruptly announced that they were imposing a 15% tax on real estate purchases by people who weren't citizens or permanent residents, as of 1 August. This caused the market to accelerate madly at the end of July and then stutter quite a bit this month. On the other hand, I've started seeing listings advertising a 15% discount to foreign buyers, so there's that.
Last week there were pretty much no places on the market that we would even consider. The situation has improved somewhat; we're going to a few open houses on Sunday and a couple more plausible listings have popped up too.
Other good things: We're both employed, with no kids, so we don't have to worry about schools. We have amazing credit and some savings. And we're able to take advantage of what's referred to as "intergenerational wealth transfer", i.e., hitting up our parents to help with a down payment.
So it's not as bad as it would have been had I written this post last week like I'd been threatening. But it's still not good, and I'm not terribly optimistic. Ask me again after we see the places on Sunday.