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why not live in van? i think everyone should. it is easy to afford, they just have multiple families living in a single house! rentals galore, have many people living in your house for years! welcome to the city!!
 

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The Vancouver market is actually reasonably priced if record low mortgage rates linger over the next 10 to 15 years. Of course, it's hard to predict where rates are headed. For my selfish reason, I like to see Canada follows Australia's lead to raise interest rates to keep the RE market from overheating.
 

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Rickson where's the Toronto Graph?

I read that the Bank of Canada may raise interest rates to slow down the Real Estate market.

http://www.google.com/hostednews/canadianpress/article/ALeqM5gbE0zHyoMVL6i7BTQUONG7URZsdQ

http://www.google.com/hostednews/ap/article/ALeqM5gKP6ISKbUaLQd0nINgrgqrOSqr2wD9B75BN81

That one is about asset bubbles and why they keep happening.

That is one nasty graph to buy into. My husband was in California before the housing crash and he saw what was going on there. People were buying houses and getting crazy mortgages and selling every year or two trying to build equity. There was no way they could afford the payments the way the mortgages were structured. In Canada the nastier mortgage products were never even offered. Interest only, balloon payments and more crazy mortgages that seem absolutely insane to anyone not on drugs. Problem is that if you wanted a house in the last 20 years in California you had to play the game along with everyone else.

That's what I think the most beneficial role our government plays. They are the protector of the common people. They advocate for consumers. Because people are stupid at times. We are told buy a house it will make you rich. Look at all these Flipping shows (now gone :)) But If you are to buy a house the only way is to get into this crapola.
 

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I know this is impractical, but the way to stop this is for people to go "on strike" and stop buying houses. If houses are too expensive, boycott them until the prices come down. I lived in rented apartments and cottages until I was almost 50; it did me no harm. There's a lot of cultural pressure to buy a house, and people seem to think it's a requirement. It's not.

I say this not knowing what rentals are going for in Vancouver...if the monthly rent for a 3-bedroom apartment is the same as the monthly mortgage payment for a 3-bedroom house then it makes sense to buy. But apartments are usually cheaper than detached houses (as you can see in the graph above showing the difference in prices for detached houses versus condos etc.).

Prices kept climbing because people were willing to buy at higher prices. If they had kept their wallets shut and stayed where they were, prices probably would have stabilized.

It's the same deal with cellphone data plans. They're ridiculously expensive in Canada compared with many other countries, but the phone companies can get away with it because they know people will buy the plans anyway. If we all just said, "sorry, there's no way I'm going to pay that much for a data plan; I can live without one for a few more years" prices would come down in a hurry.

But, as I said, it's impractical. People will still buy houses and data plans because they view them as necessities.
 

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I am familiar with the downtown Vancouver condo market and that graph is correct. But I don't find it shocking at all. Condo have doubled in price since the beginning of 2003. But consider the reasons.

* A huge inventory of new construction came on the market with much larger square footages and much more high end finishing. The 'average' price does not compare apples to apples.

* The stock market has also doubled in that same period. There is asset inflation in many markets.
 

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hard to predict where interest rates are headed in the next 10-15 years? you are kidding me. we currently pay 2%. I will guarantee you that rates are headed up in much less than 10 yrs
try 2-3yrs. get your cash ready, housing prices are coming down..

and to kill the 25-30% returns that everyone expects of real estate (except for the past year), even though historical returns have been 8%, take the above doubling since 2003 and use the rule of 72. 72/6 is 12%, half what everyone is expecting.

they just don't factor in time nor the costs (insurance, repair, property tax, interest).

but, hey, keep buying those houses, the price will go up...
 

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Luckily I bought my house in that dip you see in 1991. I know prices are to high but alot of the buying comes from Asians with very deep pockets and I don't think many of them would care to move to anywhere else in Canada. Others have lived here for many years and also don't want to move no matter what thier house is worth. I happen to be in that boat I can't think of anywhere else I would want to live.
 

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hard to predict where interest rates are headed in the next 10-15 years? you are kidding me. we currently pay 2%. I will guarantee you that rates are headed up in much less than 10 yrs
try 2-3yrs. get your cash ready, housing prices are coming down..
I couldn't agree more! If anybody thinks/hopes that interest rates will remain that low for long, they are in for a rude awakening.
 

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The effects of interest rates on the paydown rate of my current mortgage ($250K) has been staggering.

Before everything went to heck my P-0.75 variable rate mortgage was 5.50% meaning debt servicing costs of $1146.

Presently with rates at 1.5% I'm paying a whopping $312.50.

People who bought variable rate mortgages that they can't afford at more realistic long-term interest rates (think around 6-8%) are going to be in for a rude awakening.

I hope the government is paying attention because all of us are potentially on the hook as the taxpayer is the CMHC. I'd like to see a return to a minimum 10% downpayment and up CMHC to 5% on such mortgages.
 
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