Buying into the Real Estate Hype could put you down and out.
Vancouver, is touted as one of the best cities to live in the world.
Many in society are wondering, is it?
One mantra that has inflamed many is; “British Columbia, the best place on earth”.
Who spreads these mantras?
The politician no doubt, looking to either spread their mantra to the world as a source of pride or perhaps to get British Columbian’s to buy into it?
The federal government of Canada’s Finance Minister Jim Flaherty is looking to clamp down on home mortgage regulations, what many think as a safeguard for Canadians in debt.
Perhaps this mortgage regulation is geared to prevent a possible mirroring of a U.S. housing meltdown, Canadian style. The Bank of Canada have stated many Canadians are stretched to the limit financially.
The real estate industry, particularily British Columbia, counter that these regulations will be a detriment to Canadians. Of course, some see this as those in the Realty industry once again spreading fear and hype, as certainly this may be seen as a slight against potential commissions on their part.
One wonders how this could be a detriment to Canadians? Perhaps an answer can be found if one looks further into the British Columbia Realty industry hype we have all read in the media.
Perhaps a political move is underfoot against this federal ruling? Who is to say? Perhaps a musing by some looking for answers why this ruling is good or bad. This question is for whom?
Could real estate hype begininning with the “Best place to Live in the world” or “Vancouver, one of the best cities in the world to live” fuel real estate speculation?
Many wonder if a reality check is in order as to why house prices have skyrocketed in the last decade? One example of many, is a 1,000 square foot single family home in downtown Vancouver, off Manitoba Street and 14th Avenue went for $300,000.00 in 1999. Granted, it was a 40 year old fixer upper, but certainly not out of reach for a handyman with basic tools.
Not to spread rumour and innuendo, but it is said in the summer of 2009, that same house which has changed little, located on Manitoba and 14th Street was to be sold in the spring of 2010 and expected to reach between $1,500,000.00 to $2,000,000. Hmmm, certainly a handsome profit for the homeowner, especially if a bidding war amongst purchasers ensues.
Median salaries have not gone up accordingly, real estate and property taxes have gone up exponentially, so what is the mystery? Supply and demand? Hype? Perhaps a bit of both.
Real estate in British Columbia, particularly Vancouver and surrounding regions as far as Hope, BC have many wondering, if British Columbia is the best place in the world, it seems, anyone who can truly afford a single family home within the Greater Vancouver Regional District (GVRD), especially Vancouver and nearby burgs better have a million dollars on hand.
Condos costing up wards of a half million dollars for 400 square feet of living space, if you can call it living, could buy a mansion in many parts of Canada. Point Roberts, Washington. U.S.A., close to the ocean, sharing a border with British Columbia have 1,200 square foot homes at half the cost of around $200,000. Funny, when you think of it, if not being a U.S. city, but being part of British Columbia and a 20 minute to Richmond, BC, these same water view properties would be in the two million dollar range. Can you see the hype?
Outside the GVRD a nearly new 1,200 square foot modest home can be had for around $200,000 in Hope, British Columbia. If you work in the GVRD and live in Hope, BC, the monthly travel expenses will equal or surpass your monthly mortgage payment. Certainly not a feasible way to get into the housing market.
Most British Columbian’s with a modest dual income can enter the realm of the millionaire, but are forced to live far beyond their means, resulting in a cash poor-house rich lifestyle.
It’s been said some homeowners sometimes have to make a choice of food and clothing over housing payments, some choose housing. People buy into the hype Realtors (“Fear Mongering”) love to spread “Buy now, cause they are not making any more land!”
Setbacks, such as job loss, divorce, sickness, car or home repair, a rise in interest rates, will put many in dire financial straits. Certainly, homes built with in law suites can be a warning sign for many, as Realtors gleefully chime as a way for the homeowner to get into the real estate game. The problems with this are self explanatory. Your tenant loses their job, good luck trying to evict them, there are laws in British Columbia to prevent this.
A rise in property value can mean an increase in monthly payments, world events in economy as we have witnessed cause changes in financial fortunes for everyone. Prime Minister Harper once stated, all is getting better now, but Canadians should not be too smug. No truer words spoken.
Financial advisers warn of economic shifts which could happen if mortgage rates climb a percent or so. A rise of a percentage point could bankrupt many cash poor, house rich homeowners. The question then would be, how would this affect friendly Realtor? Most likely counting their commission on your home, winners regardless if you lose your home.
Beautiful British Columbia may still be the best place in the world, but for some, British Columbia maybe wearing too much rouge, applied by a political makeup artist looking to protect their own kind and maintaining the hype all too clear for the many, but lost in translation when it comes to affordable housing.
http://english.cctv.com/20091228/103435.shtml
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