Vancouver’s Fish Story

Slap Upside the Head

cod-fish-talking-copy

A cod fish in the face might be more subtle!

For Ever and Ever

Robert Hogue of the Royal Bank of Canada in his latest report “Housing Trends and Affodability”, should be a heads up to those house buyers who think Vancouver real estate market in its present form, will go on forever.

Between the Scales

While telling us that which we already know, that “housing affordabiltiy greatly improved in the Q1-09 the teeth of his report lie buried between the scales.

Good News Old News

Sure we have experienced a windfall in affordability, in fact according to Hogue “in most areas of the country we have returned to or are near to long term averages” that he claims are “consistent with solid market fundamentals.”

Fish Story

This is all good news except that – though “the market ‘appears’ to be generally on the mend in Canada, the road to full recovery still has obstacles”. Locally, we’re all happy about the Vancouver real estate market being abuzz. However, it’s those silly little global crisis reminders that haunt us.

For those who have taken advantage of low interest rates and have netted a Vancouver home, congratulations!

Cod Filets

Hogue slaps us with the notion that affordability based on cheap rates is behind us. Noted, is that we got a few scales thrown at us as a warning in the early part of June when the 5 – 10 year rates increased.

Hogue’s fish filet tells us that “Further improvement depends on greater gains in family income.” Which he claims “SHOULD (emphasis mine), be supported by an improving economy in the second half of the year.”

Ok this is all good and hopeful – but here’s the jig.

Vinegar on your Fish and Chips

At the current G8 conference British prime minister Gordon Brown served up a well battered filet with dire warnings that as the title of the Globe and Mail article screams, a “Second wave of economic crisis coming.” Brown is not talking about fish and chips wrapped in news print.

Where are the Jobs

Quoting Brown, “I would say that in April we were having to deal with the problems that were caused by the failure of banks. Now we have to deal with the challenge of resuming growth in the world economy.” He adds that “we must do something to help the million[s of] unemployed across the world.”

Forgetful

What might that be? Brown’s solution – government regulation. It’s that stuff we had before that was designed to protect us from this mess and that conveniently everybody forgot about.

No Guarantees

If you’ve been around a while you know that everything governments do takes a long time – certainly longer than six months as hopeful Hogue suggests. Left we are, confused in finding balance with the idea that all is not as rosy as Hogue might have us believe. Concerned we are for Vancouver’s mountains and oceans those natural barriers that isolate us from the world, may not be as protective as hoped.

Faith

Look around. How many of your friends have lost their job? What are their prospects of replacing the former high pay scale career with another. On balance, if housing affordability as Hogue implies, is going to be a reflection of an improved economy, who are we to believe in light of Prime Minister Brown’s warning?

Out in the stormy cold Atlantic ocean, a Newfoundland cod fisherman worth his salt would tell you that – Yah gotta have faith!

Fresh off the Pan. Fried Fish – “Budget officer predicts 100,000 job losses this summer”

* RBC Report

*Disclaimer: Report Information Courtesy RBC. While believed to be accurate it is not guaranteed.

** Quotes from the Globe and Mail and RBC report

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

Mike Says:
July 13th, 2009 at 1:04 pm

What I have always found puzzling about the “affordability” numbers is that they use pretax income.

Let’s assume that you need to have a family income of $200,000 to buy a house on the west side. At $200,000 you are in a tax rate of over 30% (if it’s split, if it’s not, it’s more). If it costs 65% of pre-tax income, isn’t that nearly the same as 95% of after-tax?

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