FED UP WITH HOUSE PRICES?

OR READY TO CASH OUT?

BC Business Magazine - - Front Page - BY FRANCES BULA PHOTOGRAPHS BY TANYA GOEHRING

WHY THE REAL ES­TATE BOOM HAS LEFT BRI­TISH COLUMBIANS FEEL­ING RICHER AND

POORER THAN THEY RE­ALLY ARE

have seven times their an­nual house­hold in­come—which is in the healthy $100,000-plus bracket—socked away, thanks to the sale of a condo sev­eral years ago along with sav­ings from their earn­ings. Justin Ja­cob­sen, who makes a “com­fort­able six-fig­ure salary” as an in­vest­ment an­a­lyst, and his wife have also banked a huge wad of money. Nels An­der­son and his wife have amassed about two years' worth of house­hold in­come in sav­ings.

Th­ese three Van­cou­ver cou­ples in their 30s are, by nor­mal stan­dards, more than well off. They, along with many other mil­len­ni­als in Metro Van­cou­ver, have saved much more than their peers in any other ma­jor Cana­dian city, ac­cord­ing to Wealth­scapes 2016, the lat­est an­nual re­port on the as­sets, in­come, spend­ing and li­a­bil­i­ties of Cana­di­ans pub­lished by Bcbusi­ness re­search part­ner En­vi­ron­ics An­a­lyt­ics. The 30-some­things in B.C. have sav­ings and in­vest­ments that are 50 per cent higher than the rest of their co­hort in Canada. Those in Van­cou­ver have 20 per cent more than mil­len­ni­als else­where in the prov­ince.

But they feel poor, for the same rea­son they have money in the bank or in­vest­ment ac­counts. Even with their rel­a­tively good in­comes, they can't get into the prop­erty mar­ket—or at least not into any house, town­house or condo that is roomy enough and close enough to where they work in Van­cou­ver. That makes them cash rich and eq­uity poor, in a city where real es­tate hys­te­ria pre­vails. And all three cou­ples, who have started fam­i­lies and are strug­gling with the different de­mands that makes, are en­raged and frus­trated about it.

“On ev­ery front, it's all im­pos­si­ble,” says An­der­son, who runs a video game de­vel­op­ment busi­ness. “We have zero debt, four univer­sity de­grees be­tween us and no se­cu­rity in any­thing at all.”

An­der­son and his wife, Tila, pay $2,500 a month for a two-bed­room condo in the West End just big enough for them and their two-year-old, with a cramped of­fice on the en­closed bal­cony. If that ren­tal were ever to be yanked out from un­der them, their house of cards—com­pli­cated child­care ar­range­ments, quick com­mutes to work—would col­lapse. But buy­ing any­thing would mean more than dou­bling what they pay for hous­ing, a piece of math that seems un­ten­able.

“Ob­vi­ously, there are peo­ple who are truly floun­der­ing in lived poverty out there,” says An­der­son, try­ing to put his sit­u­a­tion into per­spec­tive. He's right. Many Bri­tish Columbians are truly poor, with­out any of the three pil­lars of house­hold wealth: com­pany pen­sions, in­vest­ments and real es­tate. Half of all sin­gle B.C. se­niors get by on less than $25,000 a year, ac­cord­ing to the Cana­dian Cen­tre for Pol­icy Al­ter­na­tives. About 450,000 peo­ple in the prov­ince are still con­sid­ered to live be­low the poverty line, even though 40 per cent of that group is work­ing. But there's also hard­ship among his co­hort, An­der­son con­tends. “For ev­ery­one in the mid­dle, there's noth­ing for us,” he says. “For young peo­ple, the deck is stacked against us.”

Dig­i­tal de­signer Har­ri­man and her hus­band, Ed­uardo Rabago, who works in soft­ware de­sign, live in an 850-square-foot West End twobed­room with their tod­dler for a mod­est $1,700. The only thing that seems to be avail­able to them, if they don't want to spend way over 30 per cent of their in­come on shel­ter, is “a house in East Van where some­one died,” Har­ri­man says.

Ja­cob­sen is equally stymied. He and his wife, Gol­riz Fat­tahi, pay $3,000 a month for a floor of an older house near Van­cou­ver City Hall, a roomy place they need for them­selves and their two-year-old. They face hav­ing to pay dou­ble that amount if they want to buy even a small coach house in their area. One they looked at re­cently was sell­ing for $1.5 mil­lion.

“It's kind of stress­ful,” says Ja­cob­sen, who at this point can't stom­ach the idea of in­vest­ing in such an out-of-whack real es­tate mar­ket. It's made him es­pe­cially re­sent­ful about the spec­u­la­tion and cap­i­tal flight from over­seas dis­tort­ing Van­cou­ver's hous­ing fun­da­men­tals, dy­nam­ics that make his ev­ery­day life un­cer­tain. “You're deal­ing with a land­lord who you don't know what his in­ten­tion is,” he says. “My son has friends in the neigh­bour­hood, and it would be hard to move.”

“On ev­ery front, it's all im­pos­si­ble. We have zero debt, four univer­sity de­grees be­tween us and no se­cu­rity in any­thing at all.... For ev­ery­one in the mid­dle, there's noth­ing for us. For young peo­ple, the deck is stacked against us” NELS AN­DER­SON

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