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Its time to wake up!

Social, economic and environmental issues in our ever-changing world.

Re: Its time to wake up!

Postby alanjh595 » Jan 3rd, 2018, 3:12 pm

normaM wrote:Groceries and utilites could be lower too, and upshot - food and clean drinking water are basic needs. If young ppl want to own a house they could start off someplace not as costly as K town.
Not many seem to want to start at the bottom and work up.
I'd like Rock House valued at over 10 million so I really hope this idea floats and I can buy it for $800,000.
Fingers crossed


Rock houses are notoriously drafty and hard to dust. Other than that, I agree with everything else you said.
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Re: Its time to wake up!

Postby Bsuds » Jan 3rd, 2018, 3:52 pm

youjustcomplain wrote:Anything is worth whatever someone else is willing to pay for it. Simple as that.


And there's a sucker born every minute.
Nowadays it's almost rude to ask a question without Googling it first!

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Re: Its time to wake up!

Postby Snman » Jan 3rd, 2018, 4:05 pm

I'm not a smart man, but I would suggest that the new rules regarding the 'stress test' to qualify for a mortgage at a higher rate will have the effect of lowering prices. If all those that could get a mortgage for 550k can only qualify for 450k, then the market should have to respond. No?

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Re: Its time to wake up!

Postby Glacier » Jan 3rd, 2018, 4:42 pm

Even Steven wrote:
uniped27 wrote:That decision is common sense! You need to lower the price of housing. How, can you do this? Very simple, you make it a change to the law. There is no more increase in the price of housing and you lower the price of housing by 5% per year over a 10 year period.


Is this April's Fools day joke?

Whenever I hear someone state sometime is simple, or worse -- very simply, I know I'm dealing with someone who has a very simplistic understanding of a complex problem that has no easy solutions.

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Re: Its time to wake up!

Postby Even Steven » Jan 3rd, 2018, 5:44 pm

People commit too many crimes. Police and politicians are all idiots. The solution is very simple! We make the law against committing crimes. Boom, no more crime!

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Re: Its time to wake up!

Postby lesliepaul » Jan 3rd, 2018, 6:27 pm

The only thing that will bring down Vancouver's and Toronto's ridiculous astronomical rise in housing will be mortgage rates. It is about time that I become selfish and hope and pray for interest rates to climb so as to help ME with my slow growing investments. House is paid for and have no plans to move or build at this time so I am good with mortgage rates to climb also.........I won't be too hard on people that over-extended themselves, so lets see a small 2 point rise in mortgage rates. That should knock Vancouver AND Kelowna back to reality. I certainly remember the hardships of mortgage rates of the 80's.
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Re: Its time to wake up!

Postby alanjh595 » Jan 3rd, 2018, 7:01 pm

What would a higher mortgage rate do to the "new entry"? in the market? That's right that would drop the pool level down to 3/4 of what it is now. The bottom feeders will simply starve out and die.
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Re: Its time to wake up!

Postby AlienSoldier » Jan 4th, 2018, 7:35 am

alanjh595 wrote:What would a higher mortgage rate do to the "new entry"? in the market? That's right that would drop the pool level down to 3/4 of what it is now. The bottom feeders will simply starve out and die.


supply and demand, If less people can afford a million dollar mortgage, the price of the product will drop to the level that is affordable to the demand. That means with the new interest rate rule that just came into affect, those who qualified for 700,000 in Dec, would only qualify for 630,000. If there are not enough people who can still get a 700,000 mortgage the price of the house will fall to the level of demand 630,000 , 650,000 or whatever.

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Re: Its time to wake up!

Postby dominik » Jan 4th, 2018, 11:04 pm

Okay so while the OP looked at the whole thing a little simplistic the heart is in the right place.

The issue is complex and some have already pointed at some of the factors. It is crucial, that everyone looking at the housing situation understands, that while the market is ruled by "supply & demand" this term covers a lot of things. Yes the market is not sustainable and those who are able to buy homes at the high prices will find out that they may very possibly not be able to sell the homes at the prices they have paid. This is not a collapse of a bubble, alone the idea of a sudden drop of home prices due to a popping bubble isn't correct. Prices will stagnate, likely fall a bit until the rest of the economy catches up, but houses at rock bottom prices, like we saw in the United States during the 2008 collapse, are unlikely to happen here.

Let me qualify what I mean with "here", this is not an exclusive Okanagan Issue, it is a national and international issue. We are seeing similar issues and scenarios in many other countries, and most is due to speculation. Inventory matters but unless you forgot the collapse of the mortgage industry, which was very much related to speculation on the market and the complete lack of regulation, you will have to admit that market speculation plays a role in this.

Inventory is quoted many times as the reason for the rising cost but that alone simply doesn't cover the the spectrum of issues which contributed to our high prices. Current income levels in most areas do not support the amount of people actually owning homes, which actually plays another role in the whole housing situation. We are starting to see the fallout from 2008 and it isn't in a way we had anticipated.

Lets break the factors down;
  • Low Interest / badly qualified mortgages, during the 2008 financial crisis.
  • Buyers purchasing more properties than they could afford driving up scarcity and increasing prices.
  • Home Flipping, fast unregulated buying and selling of homes without any oversight and regulation.
  • Priority for construction became luxury/high end homes, increasing inventory in one sector while leaving middle class and lower class earners scrambling for an aging and declining inventory.
  • The Construction sector started aiming at low rise wood based constructions for luxury developments (aka. High Density, perfect example is "Central Green") reducing density which at this point in areas such as Kelowna and the Lower Mainland are unsustainable.
  • Buyers over the last 10 years buying even though their income alone could not carry their homes, requiring suites to subsidize, and lets not kid ourselves, pay for the mortgages.
  • A rising cost in the rental market is also attributed to the perception of landlords who rent their suites (to pay their mortgages) or apartments, properties without understanding the type of properties they are trying to rent. I know some of you will argue that this is not right, but sadly this is a fact. A Suite in a single family home should NEVER be more expensive than an apartment or condo, and we are simply not seeing that nationwide at this point.
    Too many people are arguing that the market is what people are willing to pay, but we have long surpassed that. We are at a point where people are just trying to find a place to live and end up working for just that. This is a very dangerous situation.
  • Rising property taxes, to discount the high cost of housing to greed alone is fallacious as well, cost of owning a house have been steadily increasing on homeowners as well, this should not be discounted.
  • Rising interest rates, as mentioned above the property owners are facing rising costs, and this will continue over the next years and we may see double digit interest rates again which may make owning a home a luxury, one which may exclude a large part of the population from ever owning a home.
  • Rising deposit requirements, someone addressed mortgage requirements, with the new policies coming into effect we may see a slight reduction in home prices but what this definitely shows is that the majority of new home buyers simply cannot afford to buy under current income levels.
  • Income, we have another problem here, simply said while costs for services and goods have increased over the last 30 years while income has not held pace with inflation. This is a serious issue, not many want to see it that way, some may see it as an excuse it simply cannot be discounted.
  • Jobs vs. Careers, another issue which is creeping up is how technology (not just machinery) has affected the work environment, computers, algorithms, and software allow one individual to perform jobs of two to three people. This is something we are now starting to see, some complain that people are just lazy and can't get jobs without more education etc. This is an even more fallacious statement. I would challenge anyone who has worked (managed to work) in a certain industry for a long time to try to start at the bottom now, I suspect that the requirements vs. pay now would leave in you in the same situation as it does the current generation. If you say you could handle it all I will try to give you some contract work and we will see how you will perform with today's requirements for my industry, I know I'd have trouble.

I covered a lot here, some of it may be rambling to you but the facts are that we screwed the pooch here, and it will require government intervention (as we are seeing with the mortgage rules) and potentially disliked rental controls.

Someone mentioned if this were communism... or tried to state that this would be communism.... Get your head out of your *bleep*, you have never experienced communism if you think that this would make Canada a Communist Country. Simply said, we have a need for various programs, some of which you can call whatever name you want, but simply said these programs have to work for ALL people of Canada. This will mean difficult rules, hard to follow thought processes, and yes restrictions on property owners, real estate markets, and renters as well.

We are living in a very complex world, and you cannot run a country like a company, for that you'd need to be able to choose your customers and Canada has citizens from every walk of life, all of whom we need to support.

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Re: Its time to wake up!

Postby normaM » Jan 5th, 2018, 6:27 am

Being a Home Owner is not a Right. It is calling a housing market for a reason, I don't know why home owners should be punished ( aka sell the place cheaply). There are less expensive housing - tiny homes, container homes, mobile homes.
If one is really serious about being a home owner most ppl I know made sacrifices to get their first home.
I'd like a Jag, should the manufacturer lower their price to make it happen for me? Course not.
Plus it isn't just the housing prices... Kelowna is not a cheap place to live period.
Moncton has much more affordable housing as do other towns and cities.
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Re: Its time to wake up!

Postby JayByrd » Jan 5th, 2018, 7:00 am

Bsuds wrote:
Apparently they have no problem living in their parents house until they inherit said house.

If my kid wants my house he better be prepared to change my depends and spoon feed me baby food. :biggrin:

And to all the lazy *bleep* out there who didn't make the right choices and complete higher education and get a good job then...



That's pretty unkind. There's lots of people with education and good jobs who still can't afford to own property here. Some of them may be changing your depends in the future, so be nice.

Owning a house in the Okanagan is simply not realistic for a lot of people. If I was young and just starting out, and owning a home was my goal, I'd go somewhere else. And a great many people do.
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Re: Its time to wake up!

Postby AlienSoldier » Jan 5th, 2018, 8:25 am

JayByrd wrote:
Bsuds wrote:
Apparently they have no problem living in their parents house until they inherit said house.

If my kid wants my house he better be prepared to change my depends and spoon feed me baby food. :biggrin:

And to all the lazy *bleep* out there who didn't make the right choices and complete higher education and get a good job then...



That's pretty unkind. There's lots of people with education and good jobs who still can't afford to own property here. Some of them may be changing your depends in the future, so be nice.

Owning a house in the Okanagan is simply not realistic for a lot of people. If I was young and just starting out, and owning a home was my goal, I'd go somewhere else. And a great many people do.


As much as this seems like a viable option it hurts the city in the long run. It reduces the amount of taxes coming in due to young families moving away and not spending money here. It reduces the diversity of the area and the entertainment and social aspects. It increases future burdens when people move to Kelowna in their old age and require more services.

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Re: Its time to wake up!

Postby dominik » Jan 5th, 2018, 10:31 am

normaM wrote:Being a Home Owner is not a Right. It is calling a housing market for a reason, I don't know why home owners should be punished ( aka sell the place cheaply). There are less expensive housing - tiny homes, container homes, mobile homes.
If one is really serious about being a home owner most ppl I know made sacrifices to get their first home.
I'd like a Jag, should the manufacturer lower their price to make it happen for me? Course not.
Plus it isn't just the housing prices... Kelowna is not a cheap place to live period.
Moncton has much more affordable housing as do other towns and cities.


While the way you state this is rather unpleasant, and harsh, I do have to agree that buying a house should not be compared to buying groceries or a TV for example.

That being said the way you are describing it also suggests that the "lower income classes" should live in less than favorable circumstances. Now I am pretty certain you didn't intend to make that statement, as I believe your point is that one has to work oneself into the house/home they want and work hard for it. The matter of fact however now is that the housing prices have been inflated so much that even that idea of working their way into it is almost impossible for those earning below 75,000 a year.

Middle class income in the 80s was between 35 -75,000 however now you would need to make roughly 80 - 150,000. The issue though is that since the 1980s middle class income stagnated and remained roughly around 68,000. This is were we now see a massive discrepancy. We have seen a 3-600% increase in housing costs in the time frame that income has seen a minor increase. Even worse, the change of costs and change in the income levels, has essentially made those who were doing quite well for themselves now become low income or paycheque to paycheque earners.

This is something that shouldn't be ignored. We essentially (not just politicians) have heavily contributed without paying attention, while we should have. Annoyingly this is not just a Kelowna issue, hence it should be seen as something of national interest. We do need to correct this, and we are not talking about home owners being punished (wrong terminology) as this is the risk every home buyer takes. A market correction would likely ensure a stability in communities which we are dearly lacking right now.

The tightrope we now need to walk is the one that avoids a recession or collapse of housing markets (as for BC now that is THE primary industry outpacing exports and resource based industries, which should never have happened). Simply said, if some sort of adjustment across the board doesn't happen soon (and we aren't talking 10 years), homeowners may find themselves "punished" by a self correction which could devalue homes or cause other severe societal repercussions.
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Re: Its time to wake up!

Postby greenmile » Jan 15th, 2018, 5:04 am

uniped27 wrote:The real estate pricing in this province is ridiculous. The higher the price goes, the more everyone makes but you. You don't need the high profit on your house because all you do is pay it out to next house you buy. The only winners here are the real estate company and agent. Not to mention the government with all of their taxes and transfer taxes. The big loser is you and your children who will never be able to afford to own a home. We have a large group of people that sit in a chamber and have no control or balls to make the right decision. That decision is common sense! You need to lower the price of housing. How, can you do this? Very simple, you make it a change to the law. There is no more increase in the price of housing and you lower the price of housing by 5% per year over a 10 year period. Everybody will then be able to afford to purchase a house in the near future. You will also curb the desire to have foreign investors come in a purchase your homes. They won't buy in a market that has a decreasing market. That is the only way to help our children have a hope of owning their own home in the near future.

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Re: Its time to wake up!

Postby greenmile » Jan 15th, 2018, 5:14 am

dominik wrote:Okay so while the OP looked at the whole thing a little simplistic the heart is in the right place.
An economist even Warned that high real estate prices are a receipy for a disaster and socially everyone will pay for it in a bad way
The issue is complex and some have already pointed at some of the factors. It is crucial, that everyone looking at the housing situation understands, that while the market is ruled by "supply & demand" this term covers a lot of things. Yes the market is not sustainable and those who are able to buy homes at the high prices will find out that they may very possibly not be able to sell the homes at the prices they have paid. This is not a collapse of a bubble, alone the idea of a sudden drop of home prices due to a popping bubble isn't correct. Prices will stagnate, likely fall a bit until the rest of the economy catches up, but houses at rock bottom prices, like we saw in the United States during the 2008 collapse, are unlikely to happen here.

Let me qualify what I mean with "here", this is not an exclusive Okanagan Issue, it is a national and international issue. We are seeing similar issues and scenarios in many other countries, and most is due to speculation. Inventory matters but unless you forgot the collapse of the mortgage industry, which was very much related to speculation on the market and the complete lack of regulation, you will have to admit that market speculation plays a role in this.

Inventory is quoted many times as the reason for the rising cost but that alone simply doesn't cover the the spectrum of issues which contributed to our high prices. Current income levels in most areas do not support the amount of people actually owning homes, which actually plays another role in the whole housing situation. We are starting to see the fallout from 2008 and it isn't in a way we had anticipated.

Lets break the factors down;
  • Low Interest / badly qualified mortgages, during the 2008 financial crisis.
  • Buyers purchasing more properties than they could afford driving up scarcity and increasing prices.
  • Home Flipping, fast unregulated buying and selling of homes without any oversight and regulation.
  • Priority for construction became luxury/high end homes, increasing inventory in one sector while leaving middle class and lower class earners scrambling for an aging and declining inventory.
  • The Construction sector started aiming at low rise wood based constructions for luxury developments (aka. High Density, perfect example is "Central Green") reducing density which at this point in areas such as Kelowna and the Lower Mainland are unsustainable.
  • Buyers over the last 10 years buying even though their income alone could not carry their homes, requiring suites to subsidize, and lets not kid ourselves, pay for the mortgages.
  • A rising cost in the rental market is also attributed to the perception of landlords who rent their suites (to pay their mortgages) or apartments, properties without understanding the type of properties they are trying to rent. I know some of you will argue that this is not right, but sadly this is a fact. A Suite in a single family home should NEVER be more expensive than an apartment or condo, and we are simply not seeing that nationwide at this point.
    Too many people are arguing that the market is what people are willing to pay, but we have long surpassed that. We are at a point where people are just trying to find a place to live and end up working for just that. This is a very dangerous situation.
  • Rising property taxes, to discount the high cost of housing to greed alone is fallacious as well, cost of owning a house have been steadily increasing on homeowners as well, this should not be discounted.
  • Rising interest rates, as mentioned above the property owners are facing rising costs, and this will continue over the next years and we may see double digit interest rates again which may make owning a home a luxury, one which may exclude a large part of the population from ever owning a home.
  • Rising deposit requirements, someone addressed mortgage requirements, with the new policies coming into effect we may see a slight reduction in home prices but what this definitely shows is that the majority of new home buyers simply cannot afford to buy under current income levels.
  • Income, we have another problem here, simply said while costs for services and goods have increased over the last 30 years while income has not held pace with inflation. This is a serious issue, not many want to see it that way, some may see it as an excuse it simply cannot be discounted.
  • Jobs vs. Careers, another issue which is creeping up is how technology (not just machinery) has affected the work environment, computers, algorithms, and software allow one individual to perform jobs of two to three people. This is something we are now starting to see, some complain that people are just lazy and can't get jobs without more education etc. This is an even more fallacious statement. I would challenge anyone who has worked (managed to work) in a certain industry for a long time to try to start at the bottom now, I suspect that the requirements vs. pay now would leave in you in the same situation as it does the current generation. If you say you could handle it all I will try to give you some contract work and we will see how you will perform with today's requirements for my industry, I know I'd have trouble.

I covered a lot here, some of it may be rambling to you but the facts are that we screwed the pooch here, and it will require government intervention (as we are seeing with the mortgage rules) and potentially disliked rental controls.

Someone mentioned if this were communism... or tried to state that this would be communism.... Get your head out of your *bleep*, you have never experienced communism if you think that this would make Canada a Communist Country. Simply said, we have a need for various programs, some of which you can call whatever name you want, but simply said these programs have to work for ALL people of Canada. This will mean difficult rules, hard to follow thought processes, and yes restrictions on property owners, real estate markets, and renters as well.

We are living in a very complex world, and you cannot run a country like a company, for that you'd need to be able to choose your customers and Canada has citizens from every walk of life, all of whom we need to support.
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