I Am Not Alone: Young People Stuck At HomeSeptember 21st, 2007 by Michael Kwan
I realize that you should take national surveys with a serious grain of salt, but they can sometimes provide some rather interesting information. A little while back, the local newspaper reported that about half of Canadians aged between 20 and 30 are still living at home with their parents. Falling under this category, I let out a fairly substantial sigh of relief, realizing that I am not alone. The housing prices in Vancouver, as I’ve said before, are way too high for the average person, especially if they don’t have any sort of substantial nest egg saved up.
Nearly one year ago, I predicted that the bubble was about to burst in Vancouver’s booming housing market. While the market has certainly slowed down, I’d say that the bubble is far from bursting. To put things in context for anyone not living in the Vancouver area, my cousin bought a one-bedroom condo just east of the downtown core a year or two ago. He tossed in the down payment before the first shovel broke ground and he paid $250,000 for the 700 square foot unit. The building is now complete and his real estate agent has valued the suite at $370,000. That works out to over 500 per square foot.
With prices like that — the average single detached house in Vancouver proper is currently north of $700,000 — it’s no wonder that many young people are seeking homes for rent rather than homes to buy. It also certainly doesn’t help that interest rates have taken a fairly steep increase in recent years as well. If you’re looking for a ten-year term, it’s not out of the ordinary to get a mortgage rate of over 8%. What this means is that for $300,000 loan, the home mortgage payment is about $2400 a month. Add strata fees, utilities, insurance, food, clothing, transportation, and other set costs and you’re looking at a rather expensive lifestyle, even if it’s not exactly posh. And that doesn’t even include the initial costs of buying furniture and hiring a moving company.
Of course young people in Canada are having a very hard time moving out from mommy and daddy’s place. I was born and raised in Vancouver, so it’s difficult for me to imagine living in any other city. Traveling is great — Ensenada and Six Flags were a lot of fun — but that’s for a holiday, not for a permanent relocation. At the same time, housing prices in the Maritimes, for example, are much lower than in Vancouver.
A luxury home in Vancouver is one that is priced at $2 million or more. According to official industry definitions, the prevailing “luxury home” in (I think) Nova Scotia is one that is north of $200,000. You can’t even get a one bedroom apartment for that price in Vancouver, let alone a “luxury home.” Maybe I should just move State-side and take advantage of the plummeting prices resulting from the sub-prime mortgage crisis.
Any other young Vancouverites feel my plight? Any of that aforementioned 50% want to chime in with their comments?