# First time buyer in Vancouver



## hedgehog12 (Feb 28, 2011)

I recently got out of debt, and finally got some savings on track. I’m thinking of buying a place, a small condo or apartment. The nearest big settlement is Vancouver, BC and real estate prices there are very high.

I don’t have enough to buy a house. I’m eager because housing prices in Vancouver have gone steadily up, even though “experts” have been saying prices are “unsustainable” and “will drop” since 2009. Well, it’s 2012 now, and it hasn’t happened. Prices are still climbing (albeit slowly). If it keeps going up, how will average working men like me be able to afford real estate?

I read the other thread on Vancouver Real estate, and not of us are asian gazillionaires. Where will we live? 

I’m worried.

My mortgage will run into $1500+, not including property tax, insurance, and various fees. I won't lie, I'll be stretch fairly thin, and money will be tight. 
But I feel like I have to do something soon, before real estate becomes unaffordable. 

I have a feeling Vancouver might soon turn into London, Tokyo or NYC where a place close to the city is unaffordable for the average worker guy. 

A penny for your thoughts? (not literally )

thanks!


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## diharv (Apr 19, 2011)

Being panicky and feeling pressured to buy something or be priced out of the market forever is what will lead you into getting in over your head. Vancouver is not becoming unaffordable but is already there. I'd wait it out and keep renting .When the drop does come the concrete cubicles in the sky will fall the hardest.I think the latest studies are showing that ownership costs are alot worse than renting but I don't know the source , just something I heard on the news.


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## Sherlock (Apr 18, 2010)

My question is, why do you want to own a house (or condo) instead of just renting? Is it because you think it would be cheaper than renting, or is it because you believe it would appreciate and thus give you good capital gains, or is there some other reason?

I don't know about Vancouver, but here in Toronto renting a condo is much cheaper than buying one, so by renting I can save a significant amount of money, which I invest. If I were to buy, my condo would need to appreciate by a massive amount (much faster than Toronto real estate is currently appreciating) in order to match how fast my money grows by renting and investing the difference.


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## kcowan (Jul 1, 2010)

I rent in Vancouver. I could afford to buy but, had I bought, I would have had to sell in order to afford to retire. Been there since 1995. Places comparable to where we rent sell for $2 million and have $1000/month taxes and another $1000 in HOA fees!

I agree that Vancouver is becoming a city of renters, except for rich Asian and Perisan immigrants.


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## hedgehog12 (Feb 28, 2011)

Sherlock said:


> My question is, why do you want to own a house (or condo) instead of just renting? Is it because you think it would be cheaper than renting, or is it because you believe it would appreciate and thus give you good capital gains, or is there some other reason?


I'm sick of renting. drilling a hole here, hang a painting there, I have to get permission for everything living under the yoke of someone else. Instead of "war fatigue" I guess I'm experiencing "rent fatigue". 

My folks also raised me to one day "own a place of my own".

"Luxury townhomes for $896,000! Final release!" 
I passed by this sign yesterday, getting off a 12 hour shift. It almost made my eyes bleed. what the hell is this world coming to??




kcowan said:


> I rent in Vancouver. I could afford to buy but, had I bought, I would have had to sell in order to afford to retire. Been there since 1995. Places comparable to where we rent sell for $2 million and have $1000/month taxes and another $1000 in HOA fees!


What are HOA fees?

Btw I’m 27 so if I do buy, I’ll be taking on a hefty mortgage for a sizable portion of my life.


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## dubmac (Jan 9, 2011)

hedgehog12 said:


> I'm sick of renting. drilling a hole here, hang a painting there, I have to get permission for everything living under the yoke of someone else. Instead of "war fatigue" I guess I'm experiencing "rent fatigue".
> 
> My folks also raised me to one day "own a place of my own".
> 
> ...


Hedge...
I was in the same situation as you (as far as I can tell) in that I arr'd in Van in 1993, rented from 93-2003, and became increasingly worried to see all that equity leave on a monthly basis. I basically explained to the missus that we buy a place (soon!), or we leave (soon!). With some luck, we got into the market in 2004 and I do not expect to ever buy another in the current or foreseeable RE climate in Vancouver. This place is like Mars or Jupiter compared to other places. Arguably, vancouver is already like London, or Tokyo - tho I don't know what kind of run-up they have exp'd in prices. Here are my thoughts -
1. Cheap money will not last forever - it never does! If you are stretched at 1500 per mo, then you should prepare to pay more if/when rates rise.

2. Friends of mine have purchased in places like Gibsons - he rides the ferry each day to work, but he has a place to do all of the things that you mention (drill a hole here, hang a pictures there etc...), the gulf islands also have reasonably priced RE, as does Squamish. The commute from Squamish to downtown Van is quite reasonable - prices in Squamish are coming down according to my bro who lives there.

3. My folks also put the same emphasis on owning over renting, but they didn't experience the same environment that we are in. Don't let that phrase cloud your judgement.

My point - you can still get a lovely place near Van for say 300K. carry 200K, and rent / share cheap accomodation during Mon-Fri each week while you stay in the city - afterall you're only 27! - me, I am within 10 yrs of retirement!


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## Potato (Apr 3, 2009)

hedgehog12 said:


> [...]though “experts” have been saying prices are “unsustainable” and “will drop” since 2009. Well, it’s 2012 now, and it hasn’t happened.


"It hasn't happened yet" isn't a very strong refutation of a prediction. After all, it hadn't happened yet at the time the prediction was made, too. And at the end of the boy who cried wolf, there really was a wolf.

So, are the "experts" (including myself) wrong, or early? You have to decide that for yourself.



> If it keeps going up, how will average working men like me be able to afford real estate?


Exactly. How much higher can prices possibly go?



> But I feel like I have to do something soon, before real estate becomes unaffordable.


This is emotional or "panic buying" and it's not a good thing. Buy because you want to live there forever and don't care about money, or because you like it and it makes sense, or just because it fits your life, not because you're afraid the option to buy may go away at some enigmatic point in the future.



> I'm sick of renting. drilling a hole here, hang a painting there, I have to get permission for everything living under the yoke of someone else. Instead of "war fatigue" I guess I'm experiencing "rent fatigue".


Ok, so this is a problem that _needs to be fixed_. One potential solution already mentioned is buying your own place. But is there a way to fix this and still stay a renter?

First off, where is the "getting permission for everything" issue coming from: your own courteousness, or an overbearing landlord? If it's the latter, then simply get a new landlord (move). If it's the former, then all I have to do to help you fix your life is say these magic words: you're too nice. You do not need to get your landlord's permission to make minor changes to the dwelling: it is their building, but _your home_. You can hang a painting, drill a small hole, paint the walls, and re-hang the refrigerator door to open the other way. The only requirement is that you put it back the way you found it when you leave.

Larger changes can also be made with the landlord's permission. In our last place, we installed a dishwasher and split the cost with the landlord, and made a lot of minor renovations that he paid the materials cost for while we did the labour: win-win for everyone. I have a friend who, with her landlord's blessing and cooperation, ripped out an old carpet and put in hardwood flooring. I know the story of a musician who temporarily soundproofed a room to become a recording/practice room, and then took the foam down and restored it to its move-in condition when leaving. If you have a problem with a place that you want to fix, odds are good that the next tenant will too, so the landlord should be happy to help accommodate reasonable changes to a structure that improve your enjoyment of your home.

And as a renter, if you find your place is getting to small for you, you just find a larger new one and move, none of this knocking down a wall and living in a construction zone nonsense that comes along with the "freedom to do whatever I want to the structure" that the owners brag about.

An analogy that sometimes works is to think of cars and hotels: if you rent a car for a day, or a hotel room for a night, you're not going to do much with them in terms of major changes, but even then you expect the companies to stay out of your personal business: if you want to sleep upside-down with your feet on the pillows or speed a bit on the highway, you bloody well will -- but changing things beyond what you yourself do is out of the question on that kind of timescale. If you lease a car for 3 years, and you want to make reasonable changes to it like tinting the windows, affixing your parking decal to the windshield, or getting snow tires, you don't call the dealership up and ask permission first; and you know minor marks in the clear coat are expected wear & tear in the process of using the car. But you also know you'll get in trouble if you get ground effects and a fart can, or put a major dent in it. Same with leasing a place: if you want to paint the walls or hang a picture, just go and do it. If you need more tools than a screwdriver -- and especially if you reach for a sledgehammer -- _then _call the landlord.

Now after that nice long rant I've got to take a second to be sure I'm being clear: the world does not need bad tenants, so don't wreck the place or completely shut out your landlord. But you've got to find a good balance where you're free and happy to live your life in your home, understanding that reasonable wear & tear is to be expected and a normal course of living somewhere, and where the landlord's property is respected and left in good condition for the next tenant. And it sounds like you haven't found that balance yet.



> My folks also raised me to one day "own a place of my own".


And that was probably great advice when they gave it, but is that still the case at 300X price-to-rent?


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## hedgehog12 (Feb 28, 2011)

Thanks for the advice!

I actually found a few places I like, and would want to live in. It's a couple of Townhouses though. A few nooks and crannies where I can stick a potted plant and keep pets.

Are townhouses better? What are their advantages over apartments or condos (besides being higher in value and more space)? Why does everyone say they're better?

I know virtually nothing about them.


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## the-royal-mail (Dec 11, 2009)

Townhouses have lots of kids and are densely populated with lots of people. Hard to find parking for cars for yourself and your guests etc. Go and drive around on the weekend (when the weather is nice and people are actually home) and see what it's like. I've done that and decided I don't like it, but you might like it.

Tower living at least offers you more privacy and tends to have far less kids and "in your face" activity like you get in townhouses.


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## Saniokca (Sep 5, 2009)

hedgehog12 said:


> I have a feeling Vancouver might soon turn into London, Tokyo or NYC where a place close to the city is unaffordable for the average worker guy.


An average working guy already cannot afford it. That only means one thing: an average working guy cannot afford it. there's your answer. Either rent or leave. Otherwise you become emotional and overspend. An average guy cannot afford a Mercedes either but become a slave with to 80 payments and voila! Is this smart? No.

Your parents raised you to own a home. You should put emphasis on "you". When you have a mortgage it is owned by the bank... You might be able to put a nail in the wall but you will be stuck in this place with a huge debt (especially if prices do drop).


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## dogcom (May 23, 2009)

I find older townhouse complexes can be very nice and have small yards to barbecue in lots of mature trees and so on. The newer ones are the ones that are really tight and really only offer a much better interior but not much fun outside. Drive around the older complexes and talk to some of the people living there.


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## kcowan (Jul 1, 2010)

KatherineB said:


> There are some good opportunities just outside Vancouver itself. Surrey, Maple Ridge, Chilliwack for example. With the upgrades in road and LRT infrastructures, these areas have some good buying opportunities...


DWs cousin lives in Chilliwack and commuted to downtown Vancouver for 3 years. It almost killed her. Any suburb should be chosen based on transit time and cost to get to work. Surrey on the LRT might work.


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## dogcom (May 23, 2009)

Commuting is also like having another mortgage on your time and the extra cost of transportation.


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## Pigzfly (Dec 2, 2010)

You can land some sweet deals renting in Van and be way further ahead than with a mortgage. One of my friends is a PhD student who lives in Kits. He and his friend pay half in rent (total) than just the mortgage costs would be on the nice, new condo they live in... let alone strata fees, taxes, maintenance etc. They live the high life, pay less than $1200/month each and have none of the stress.

What about places in Burnaby, Delta, Richmond, New West? You can get an older condo in New West for under 250, awesome transit access, they seem to be making a lot of progress on their scum bag population...

My other suggestion would be to get a two bed you can afford and commit to having a roommate for the next 5-10 years.


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## steve41 (Apr 18, 2009)

Pigzfly said:


> What about places in Burnaby, Delta, Richmond, New West? You can get an older condo in New West for under 250, awesome transit access, they seem to be making a lot of progress on their scum bag population...


Burnaby, Delta, Richmond, New West has a scumbag population? Who knew?

Now, Surrey.... that's another question.


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## Pigzfly (Dec 2, 2010)

@steve
New Westminster, specifically. It was pretty dicey there for awhile. Dying business community, rather high crime rates and such. There seems to be a lot of rebirth now.


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## Jon_Snow (May 20, 2009)

New West is on the rise, no doubt. And the Queen's Park neighbourhood is one of the jewels of Metro Vancouver.... would love a real estate correction so I can buy one of the gorgeous heritage homes there.


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## dogcom (May 23, 2009)

Sorry katherineb I was thinking farther out then Surrey.

I never liked New West but I guess it is getting better. I remember driving down by the river in New West thinking it needed a German style renovation like London got in the second world war.


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## drip99 (Aug 27, 2009)

KatherineB said:


> Lots of people commute, fact of life for many - unfortunately. If you want to be near Vancouver, but can't afford the city proper, that's the choice. Surrey is good if the LRT is your commuting choice.
> *Hopefully the car commute improves significantly with the new Port Man Bridge*.


It will be an expensive commute if you cross the new Port Mann bridge twice a day/5 days a week. At $3 per trip across the Port Mann you are looking at 120 bucks a month. Ouch.


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