Real Estate: The Hollowing Out continues.

Not Good For The School – “The chance of them coming here, even with a massive research budget, is basically close to zero becuase they can not afford the housing that they would be accustomed to for their life situation. If this city continues as it is for the next 20 years, we will have no more city.”

From VREAA Blog

serpent-eating-tail

“I was at a party last night. Some interesting local celebs were there as well as some normal people (like me). One was a young professor from UBC. They are from out of town and are quite open to both renting and leaving town in the mid-term as it does not make sense to own here. They also commented that the University has had little success in attracting talent from outside Vancouver to fill top-level positions. Let’s say you want to hire a new dean of Science. You have found a 48-year-old who is at the top of the field, an amazing educator and researcher and who would be a trophy to have in the school. The chance of them coming here, even with a massive research budget, is basically close to zero becuase they can not afford the housing that they would be accustomed to for their life situation. Thus – most jobs are being filled internally now. Not good for the school.”
– from a comment by
yvr2zrh at VCI 21 Dec 2012 4:36am

In the same comment, yvr2zrh also made the following interesting and archive-worthy statements:

Regarding market sentiment and activity:

1.) MOI for December will be the second worst in 15 years. We will likely hit 11. This is a really bad sign as we are typically quite low at the end of the year.
2.) Comparing to 2008, we are deteriorating now. For December, there are even pockets of Vancouver where we may see the December sales lower than December 2008. For November, we compared against November 2008, which is likely Vancouver’s worst month in history. We were up 90% against November 2008 in terms of unit sales but for December 2012, we are only going to be up about 35%.
3.) Van West Detached, Van East Attached and North Van are trending below 2008 lows.
4.) We are starting to see serious motivation in some sellers. Although we have the real estate board spewing out concepts such that sellers will collude to restrict supply to keep prices high, this just does not affect the market. We have a free and open market with 10,000′s of market participants. You will have a lower supply when prices are weak but this will not counteracy the downward forces of the market.

Regarding Carney’s housing allowance in London:

As someone who has worked around the world for over 10 years and who knows many of the housing situations for executives in Central London, I am not surprised or shocked at the alllowance and what this will allow him to get will be nice but not outrageous for someone of his level. In London, for $20,000 per month, you can get a decent apartment for an executive family. Remember that he will keep his house in Canada and only move there temporarily. Thus, he will need to pay out of his own pocket, extra rent, which when paid for by the BOE is taxed. Thus, a 400,000 annual allowance will basically be enough for him to get a 2,400 sq ft apartment in the city of London in which he can live and possibly use for typical entertaining.
That being said – if UBC were to hire a professor to come here on a permanent basis, in order to make them whole on housing, you would likely need to offer a 1.5 million signing bonus, which would be taxed, and from which they would have enough to get into the housing market at the level which they are accustomed to. If this city continues as it is for the next 20 years, we will have no more city.

→ 4 Comments

Posted in 07. Avoiding Vancouver, 08. Overextended Buyers, 15. Misallocation of Resources

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COMMENT:

Well, IMHO, there will be  backlash looming re Institutes of Higher Learning even at the grassroots…the Undergrads. Borrowing tens of thousands of dollars after (4) years and being that far in debt at age 22 is not a good start. Many are finding it difficult to pay back because they can’t find jobs that pay well enough. In a bad economy,each year produces more competition.  Perhaps there will be a wave of change, that the younger generations will learn to be far more discretionary, avoid the herd mentality, avoid the DEBT TRAP,….and become more self sufficient and entrepenurial. This way, they may open their eyes faster than it took many of the rest of us.

That said, one can see through any University Calendar that the majority of the Faculty has received their post graduate education at other Universities. Once hired, they wish to acquire tenure…which takes approx. 10 years. In that time frame, they wish to establish roots and likely raise a family. Till retirement , it is likely a 30 year commitment.  However , while BC is “attractive”…it is UNaffordable, and there are many far more affordable places to establish a career.  Now, this applies across the board to all professionals..ie Doctors Dentists, Engineers,Executives etc.  Hence we loose this higher income earning group. Then there is less of a buyers pool for those retiring Doctors ,Dentists, Engineers, Executives etc. who may wish to sell and downsize. So we have lost this crucial chain of continuity.

Gravity will eventually take over….the selling price , as usual, is set by the buyer. The buyer pools bids for such “Professional” homes may, on average,  have slipped quite low,( 50% off peak price would not surprise many) if at all…..people may simply shun them  as far too much cost/overhead to maintain beyond the selling price. 

This is not to say that Professionals will not come back….but their may be a large void of unfilled vacancies  for a period of time, unless, of course immigration is opened up.

 

Finally, given the aforementioned “hollowing out”….it might be prudent and pro-active to look ahead at a younger health care professional if your current one is near retirement, before they no longer accept “NEW”patients.

 

 

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