Will You Ever Own a Vancouver Home?

Fading Fast

For Gen-Xers the idea of being able to buy that little old lady’s Vancouver home in near perfect condition and close to work is according to a report by Scotiabank’s Adrianne Warren, fading fast.

Shifting Demographic

Stats Can Scotia likelihood of moving 25-03-2013

“Demographic shifts in the make-up of Canada’s population will have important implications for housing demand in coming decades. Foremost is Canada’s aging population. Canadians aged 65 and over accounted for 15% of the total population in 2011, up from 8% in 1961.”

Dire Predictions

“Contrary to some dire predictions, population aging will not fuel a demographically-induced sell-off in Canadian real estate. Today’s seniors are healthier, wealthier and living longer than prior generations. They are increasingly likely to own their own home and to live in their homes for longer. Many will not need to tap into their principal home to finance retirement.”

According to Warren, “an aging population does point to a lower level of housing turnover, sales and listings. Seniors are much less likely to move in a given year than other age groups. Many have a strong attachment to their current home and community. In a given 5-year period, only about 20% of Canadians aged 65 and over are likely to move, about half the rate of the overall population”

Does This Impact You?

From what I have experienced as a baby boomer Realtor®, Gen Xers are on a hard road. I see it in the new kids starting out in the real estate business. I see more people with university degrees than ever doing jobs ill suited to their talents. I witness the battles of Gen-Xer families as first time Vancouver home buyers who devoid of parental help, struggle to save the down payment for a 650 square foot mansion in three level walk up.

I get it! In today’s world, the Gen-Xer’s ability to own a home in Vancouver is a huge challenge.

Trappings

Though I work as a Vancouver Realtor® I am about to talk myself out of a job.

I am long past telling someone they must own a home to complete their existence. From my perspective while owning your home has its benefits it is not a mandatory requirement to fulfilling one’s life.

On the contrary, it is acknowledged that there are many places in the world where millions of people don’t own their home. Instead they rent, seem happy and appear to be OK with their lot in life. That position does not however, seem to be in line with our society’s thinking.

Here, Home Ownership is Instilled.

Ruthless Society Defined

Bothersome is that we have in our society chosen to define one’s success by the trappings on which we hang our sense of self worth. I remain uncertain that the definition of ‘life quality’ is differentiated by owning the most toys, property or renting.

Old Lady Shocked

What I’m left with is that given the current and foreseeable state of the Vancouver market, the ability for Gen-Xers to own a home is difficult and for some, unachievable.

Worse is that there does not seem to be an solution that allows for an equitable distribution of home ownership. If that solution exists I don’t think it will be achieved. Our society is simply not geared to operate at that level of equality.

Instead the home ownership benchmark is more ruthless – it is premised on whether you can afford to own a Vancouver home.

Frustrated X

Gen-Xer frustration runs deep. Perhaps this comment by alecto in the The Star serves to describe it best.

1) Your generation could walk into a stable 9-5 job right out of high school, or in some cases without even graduating high school. Our generation needs a minimum bachelor’s degree or college equivalent to even get a foot in the door. Hence our living at home longer while we complete these degrees (which, by the way, put may of us thousands of dollars in debt out of the starting gate.)

2) There’s no such thing as a “starter home” any more if you want to live anywhere near an urban center where the jobs are. “Starter homes” are 500K and up, out of the range of most young people. Why? You boomers bought your homes for $65K back in the good old days and are trying to turn around and sell that same home to us for half a mil or more.

3) There is nothing wrong with our work ethic. We work long hours in piecemeal jobs, often with no benefits, pensions, or long-term job security, moving from contract to contract at the mercy of our boomer bosses.

4) If we feel “entitled,” it’s to achieve the same things our parents did: a decent place to live, enough financial stability to raise a couple of kids. These are not lofty goals, but even these simple milestones seem so far out of reach to so many of my generation because you’ve sucked up all the resources. Thanks for that!

Timing

It’s not hard to understand the frustration felt by Gen-Xers towards Baby Boomers. Generations before and after will remain ill prepared to accept their part in changing the world. I wonder if Gen-Xers will be like the fathers of Baby Boomers who too asked “what is your problem” followed by “we did it why can’t you?”

In retrospect Baby Boomers struggled as well but from this current generation’s perspective the Boomers appeared to have had a less difficult time. Ultimately, as a Boomer I can’t help but think that we Baby Boomers simply don’t know how lucky we are to have been born in our time.

See Adrianne Warren’s Full Report Here

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:

fish10 Says:
March 25th, 2013 at 7:24 pm

Yup. you are right, so is the Gen-Xer

The bb generation have denied themselves very little. A world teetering under debt and ecological crisis can testify to that

Rob Says:
March 25th, 2013 at 7:29 pm

I have be blind sided by the sport of Real Estate out here on the west coast. I grew up in a society where owning a home was not for gains or trading but for a roof over my head. Todays constant messages from media and friends alike confirm that we no longer see housing as a home, but a commodity. It has become very interesting to watch the last few years unfold. More media attention, more tv shows on how to, more pumping by local real estate advertising “Stars”. It has become the “way” to make easy money. How can one go wrong when you can sue a developer of a pre- sale if the price of you home at time of possession is not more than what you paid? I wish I could sue every company whose stock I sold at a loss.

March 25th, 2013 at 7:37 pm

@fish
But but but…. we did it for the kids! :)

Form Man Says:
March 25th, 2013 at 9:06 pm

excellent post !

and, considering your profession, refreshing

March 25th, 2013 at 9:18 pm

@form man
*blushing*

Told-you-so Says:
March 26th, 2013 at 8:28 am

Luckily, the cure for this particular ill should be on its way…. lower prices.

Given how difficult it seems to get a decently paying job in Vancouver even with multiple degrees, whether prices will get low enough within the next couple of years to help young professionals in Vancouver is anyone’s guess. My best guess, though, is that for the forseeable future the best and brightest will continue to try and seek their fortunes outside of Vancouver, perhaps to try their hand at returning at a later date.

Vancouver needs to stop eating it’s young, or it will have no future.

Thanks for headlining this issue, Larry.

Not much of name... Says:
March 26th, 2013 at 10:14 am

Never mind Gen-X, who many are already in the market, this piece speaks more to Gen-Y. They’re the ones who are in real trouble if they feel the need to own in Vancouver.

Reasonfirst Says:
March 26th, 2013 at 10:42 am

I have a few little quibble’s about Adrianne Warren’s analysis:

“only about 20% of Canadians aged 65 and over are likely to move, about half the rate of the overall population”

1. This ignores the fact that this 65+ co-hort is growing so the absolute number of moves will grow.
2. It ignores the fact that the age cohorts between 19 and 39 are often moving from one rental to another several times. If you only look at movers that climb the property ladder then the 20% is probably much more than half of the overall population movers.
3. Those below 65 that actually move after buying are more often than not upsizing, while the over 65 are downsizing.
4. When the over 65 move to the “great beyond”, they are probably not counted as movers but their house still gets sold.

Having said that, I agree that it is a long drawn out process (albeit inevitable). My parents are 82 and 92 and stiil live in the home I grew up in.

Boombust Says:
March 26th, 2013 at 11:53 am

If Gen-X wanted their own home RIGHT NOW, I’d say forget it.

Give it a year or so, things will be MUCH better!

Gen Xer Says:
March 26th, 2013 at 12:14 pm

Larry, you do realize that Generation Xers are no longer in their 20s? We grew up too. Reality Bites is almost 20 years old!

I’m part of Generation X, and I’m 45. In fact, there were only 5 years of “baby busters”: 66-71. Anyone born since 1972 is a part of Generation Z (by Stats Can).

I used to own — for 10 years in the 90s. Then I sold up (before the boom) and moved away, and by the time I came back, buying was no longer an option. Well, at any rate, not an option I wanted to exercise. So now we rent.

The last time I bought, it was because I was worried about being priced out of the market. And then the market flattened. For 10 years! If that happens again (and why wouldn’t it, eventually?), for me that would be the time to buy. If it doesn’t happen, I won’t spend time whining about it.

By the way, I was only gone for a few years — but since when did we become such huge whiners?? Is this part of the post-Olympic effect? ;-)

Anyways, if you’re young, with multiple degrees, and no children to support, see it as an opportunity. Travel! Find a job elsewhere. You’ve got skills and mobility, for goodness’ sake. No need to saddle yourself with a 25 (or more) year mortgage. Live a little while you can….

rf Says:
March 26th, 2013 at 4:31 pm

I can live with it as long as I don’t have to hear seniors staying in $2million homes whine about not be able to afford property tax or expecting discounts to subsidize them to afford to stay put.

You can defer property taxes and pay a whopping 5% interest on the amount deferred. Don’t whine about not wanting to pay interest. So your kids inherit the tax free asset with $100,000 in taxes due. They can split up the other $1.9mil tax free and be thankful. Don’t ask other families to subsidize you.

When Gen-Xers making $150k are paying 45.7% tax on every incremental dollar they make, just to try to have a chance at owning those homes (competing with untaxed foreign money being shuttled in to resident children so they can buy), I don’t want to hear cries of poverty and injustice from those who are living in an uncashed winning lottery ticket.

Just like those Gen Xers who have lived here 40 years and have the choice to move to a cheaper city or place, so do aging baby boomers and seniors.

Why it’s so unbecoming for people making $200,000 to complain about taxes, it’s equally unbecoming to listen to 75 year old with a total net worth over $2,000,000 plead poverty.

Stay put! Just don’t whine about it and accept the costs that you don’t even have to pay in your lifetime.

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