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Why we Chose to Rent

UrbanWorkbench has changed location, and we are now broadcasting over the interweb tubes from Langley, B.C.

Having made, in the eyes of most aspirational Canadians, a backward move from home owners to renters, I can say we are most pleased with our decision, particularly with our move to the lower mainland factored in. Despite assurances from the real estate talking heads that we should be lining up to buy a house in North Vancouver at an average bargain price of a cool $1.1M, we are not convinced this is a smart move:

The price of a “standard” two-storey house in Vancouver and on the north shore jumped 10 per cent to $1.1-million in the first three months of 2011, according to research last week by real estate agency Royal LePage. The figure puts the city at triple the national rate for a typical two-storey residence – an average of $379,000, up 4 per cent in the past year.

Source: Globe and Mail – What’s Next for Vancouver’s Hot Real Estate Market

tumbleweedy

It is hard to know what the real cause of the push for higher prices has been, or whether it is a bubble waiting to pop or not, but these are some MLS stats quoted on a website that has no reason to “pump up the jam” the way that many realtors do, “it’s always a good time to buy!”


The Richmond market, ground zero for China frenzy, has died.

  • Listings have exploded. The number has more than doubled since the beginning of March (going from 400 to 850).
  • Sales have collapsed. In February, 250 properties sold. In March, sales were 260. In April, it looks like 120 – down 52%.
  • Inventory is swelling. In February there were enough homes listed to last 1.5 months. That has suddenly shot up to 7 months.

And even on the west side of Vancouver, where ugly boxes built 40 years ago were overrun during open houses and have been selling for $1.3 million, sales volumes have just plopped by 30%. Across the entire Van area, it looks like sales volumes will be lower in April by 20%. So much for the Spring market.

Source: The Greater Fool – It’s Over

Here’s an assessment of the affordability and outlook of the Vancouver market from the same post on the Greater Fool:

It now takes more than 70% of gross household income to carry the average Vancouver property. Across Canada, it’s almost 50%. Factor in rising interest rates (the next Bank of Canada announcements are May 31 and July 19), higher taxes (that happens after May 2nd), an economy drop-kicked by a $1.05 dollar, structural unemployment and flatlined wages, and there are no economic fundamentals supporting the housing market. Only hormones. Media drivel. Marketing dinks. Delusion. Public hysteria. Your idiot father-in-law. And Chinese. It’s over.

So while we celebrate the fact that we walked away from a property we’d owned for four years with our pants still on, we watch the media (that has turned home improvements and real estate prices into a facsimile of news) continue to find people to talk up real estate. Have you considered just how much money is raised from the real estate focus specials and house for sale ads in the printed media? Might that have something to do with the message being promoted?

Mike Thomas

Mike Thomas P.Eng. ENV SP, is the author of UrbanWorkbench.com and Director of Engineering at the City of Revelstoke in the Interior of British Columbia, Canada. If I post something here that you find helpful as you navigate the world of engineering, planning and building communities, that’s wonderful. But when push comes to shove: This is my personal blog. The views expressed on these pages are mine alone and not those of my employer.

3 thoughts on “Why we Chose to Rent

  1. Not to mention that it gives you freedom of movement. One never knows now how long you will be able to stay in a job and have to move.

    With more empty houses I would imagine the rents will be coming down? then you can have your pick of location and price.

    Hope you have settled in well in Langley.

    1. This is often cited as a reason for the government to adopt policies that limit home ownership, in that labour mobility is a net positive for the economy overall, (but maybe not for a small community like Castlegar).

  2. With more empty houses I would imagine the rents will be coming down?

    The problem here is that morgages and developers need to be paid, there will of course be people that will take what they can get when it comes to renting their property out but alot of people will have a base that they simply cant go below for fear of a morgage default

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