Personal Finance

How much do I need to make, in order to afford a 500k home in Vancouver?

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  • Nov 23rd, 2011 12:31 pm
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Jr. Member
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Sep 16, 2011
153 posts
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CALGARY
Generally, the rule of thumb is 4x your income is what you can afford so 125k*4= 500k

But since you are in Vancouver, do what most people new homeowners do, make your money in Hong Kong or Dubai and they come back to Vancouver (if you want) and pay it all in cash!!!

But seriously, Vancouver is an exception to the rule, I think they use different metrics over there (like Quebec, but in the opposite direction).
Here is a house I found in Van

http://www.realtor.ca/propertyDetails.a ... -123275113
Its 525k (land transfer tax --- which in AB is like 1k but BC might be like 16k!!!)

Try budgeting for 550k and 100k down
you get
Monthly: $ 1725 at 3% over 35 years (that's being generous).
So lets assume the metrics are generous and allow 40% of pretax income you need $4300/month or 51k a year.

Best advice is get 2 incomes find a nice Asian sugar momma!!! There are a tonne in Vancouver
Boycott Rogers!
Avoid their credit card, cell phone, internet, home phone and cable services at all costs!
Use your antenna and get FREE HDTV over the air instead of Robbers cable.
--- Yet another Robbers rate increase
http://www.digitalhome.ca/2011/01/roger ... march-1st/
--- Even worse in 2012
http://www.rogers.com/web/content/rate-increase-info
Deal Addict
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Mar 16, 2006
1095 posts
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Unemployed and you are thinking about owning a home?

Find a good job first, if not available in Vancouver, broader the search; into a different province if needed.

I always thought I can own a house before 30 but life doesn't work that way. Finally, got a good job but it was in a small town in Alberta. The catch is I had to move from Ontario. Now at 31, my wife and I managed to get a mortgage for our first home. We did not want a big $500k yet so we are building a small duplex to start easy and see how thing work out.
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Sep 16, 2011
153 posts
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CALGARY
2k4accord wrote:
Nov 20th, 2011 8:34 pm
Unemployed and you are thinking about owning a home?

Find a good job first, if not available in Vancouver, broader the search; into a different province if needed.

I always thought I can own a house before 30 but life doesn't work that way. Finally, got a good job but it was in a small town in Alberta. The catch is I had to move from Ontario. Now at 31, my wife and I managed to get a mortgage for our first home. We did not want a big $500k yet so we are building a small duplex to start easy and see how thing work out.

2K4ACCORD, that's the way to do it!
Welcome to Alberta! The best province in the country! (also the most humble :) )
Boycott Rogers!
Avoid their credit card, cell phone, internet, home phone and cable services at all costs!
Use your antenna and get FREE HDTV over the air instead of Robbers cable.
--- Yet another Robbers rate increase
http://www.digitalhome.ca/2011/01/roger ... march-1st/
--- Even worse in 2012
http://www.rogers.com/web/content/rate-increase-info
Deal Expert
May 30, 2005
41728 posts
2632 upvotes
Richmond Hill
aras wrote:
Nov 20th, 2011 6:35 pm
Thank you for that info. So need to make +5k/month.

I thanked everyone who contributed to this thread but want to make a few points.

Jon Lai says I should be making about 150k to 200k/yr in order to consider such a house. But that's insane! So only doctors and very successful businessmen can afford a 500k house? Is it this bad in other countries, I wonder. This means that a large portion of people working full time in Canada can't afford to buy a house (or maybe they partly own a house which they don't know they can't afford in the long run..if that makes any sense).
I agree, it's quite insane. The fact that you want to buy a 500K house, that is. Like others have said, Vancouver has one of the highest property price as a percentage of GDP in the world - somewhere between 2nd and 5th. Hong Kong is 1st, AFAIK, or some other densely populated Asian city.

Also, with the property prices where they are now, the typical person simply cannot afford a house with just one breadwinner in the family. 150-200K sounds ridiculous for one person, but what about two? Your wife/spouse/girlfriend should be footing half the mortgage. That reduces down to 75-100K. Still high? Yes. But more realistic? Definitely.

Don't forget, the number I quoted is the amount you should be making in order to afford the house comfortably. You can easily do 4X annual, which brings it down to 125K or 62.5K per two persons. Still sounding ridiculous? If so, you should definitely reconsider buying a house.

In Toronto, you could buy a new 3 bedroom 2000 sq. ft. house in the suburbs for 500K and change.

If you can't afford a 500K house (which you can't, comfortably at least), then you have to make some sacrifices. Live in smaller communities, farther from the city, or smaller, or a condo. In Halifax, you can get the same house that costs 500K in Vancouver for about 100K.
aras wrote:
Nov 20th, 2011 6:35 pm
For several posters including Jon Lai who say I should focus on getting a job first: It just doesn't work like that. I did have jobs but could afford **** with them. One was the lowly mindnumbing filing job. Then there were the occasional research assistantships and so forth at the college, which were more interesting but barely paid more. I don't want to live on 2k a month, doing the kind of work that I hate.
But it DOES work like that. Find the job that you like first, then look for a house or property that fits the bill. You can't find the bill, then find the job that fits it. Can I first buy a mansion, then look for the job that pays for it? No. Life doesn't work like that, because you can't guarantee what kind of job you can get in the first place. Remember, in this economy, the jobs pick you, not the other way around.

I admire that you were able to quit your old job because you don't want to live the life you dislike, but for most people, life doesn't work like that. Without a job, how do you feed yourself? Are you living in your parent's basement, for a lack of a better RFD-meme?
aras wrote:
Nov 20th, 2011 6:35 pm
So that's why I'm considering the price of investing in long term college education. I have no particular talents, am not handy nor have the sort of skills (aggressive, energetic, driven) that make someone succeed in business and sales. And I have tried. So I can't be the plumber who did not go to university but who charged me fifty bucks just to come and take a look at the pipes for ten minutes, nor be some guy with the fierce handshake and knack for selling cars. I know someone who never went to college but as a car salesman in his 20s, he's making about 60k a year his second year on the job, is married and paying mortgage on a decent house. So given my lack of skills, specifically ones valued by the market, I need to invest in college education. But in order to do that, I need to have goals. Those goals determine the answer to my questions: Do I need to go for PhD vs masters? Should I go in this field or that? How to balance doing something that I love with making good money, enough to reach most of my goals.
Despite what people say, you should not go to school in order to get a job, but rather because you enjoy the particular field of study.

No offence, but it baffles me that you do not even have a college degree and are considering a 500K house. Most university graduates' first full time job pays on average, about 30K. Science majors tend to get low to mid 40's, unless you're a pharmacist, then you get into 70K+ easily. Engineers tend to start at 50K, and people going into the banking industry usually work on commissions and vary all over the place.

I'm not saying you're worthless, but please be realistic. If university graduates are only making, on average, the numbers I quoted above, how much do you think the average person with only a high school diploma deserves?
aras wrote:
Nov 20th, 2011 6:35 pm
I wish the answer was as simple as "doing what you love". I enjoy writing poetry for instance. But what if it never gets published? Do I enjoy sending my poems to hundreds of magazines, with their different criteria, requiring different formats, taking months to get back to me, and the 1% that accept my work, paying me in peanuts? No! Also, I hate not having any money, and I hate bills. Now, the other side of the coin about doing what you love is having what you love: I do love to have a nice car, a nice computer, nice home, to go on vacations, etc. To get them, I may require to study hard, to do some things all day that I hate, but then the payoff is nice. So I have to find a happy balance where I do some things I enjoy during the day (say, help people and make their life better) and of course some things that I hate (say, paperwork, or dealing with upset people), and then in return buy a house--maybe not a great one but a decent one, with a decent car, and also not worry about the bills. House is one. Having a car that does not break down every two weeks is another. I hope this clarifies my intention.

If you can't pay the bills, then spend less money. You can't have the best of both worlds.

Your intention is clear, and is just about what everyone in their early 30's wants. Unfortunately, most people do have to live with that type of worry in their day to day life.

If you want to find the perfect balance between work and life, I can safely assure you that at this point, you cannot afford your own house. Why not rent?
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Sep 5, 2005
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aras wrote:
Nov 20th, 2011 6:35 pm
Thank you for that info. So need to make +5k/month.

I thanked everyone who contributed to this thread but want to make a few points.

Jon Lai says I should be making about 150k to 200k/yr in order to consider such a house. But that's insane! So only doctors and very successful businessmen can afford a 500k house? Is it this bad in other countries, I wonder. This means that a large portion of people working full time in Canada can't afford to buy a house (or maybe they partly own a house which they don't know they can't afford in the long run..if that makes any sense).

For several posters including Jon Lai who say I should focus on getting a job first: It just doesn't work like that. I did have jobs but could afford **** with them. One was the lowly mindnumbing filing job. Then there were the occasional research assistantships and so forth at the college, which were more interesting but barely paid more. I don't want to live on 2k a month, doing the kind of work that I hate.

So that's why I'm considering the price of investing in long term college education. I have no particular talents, am not handy nor have the sort of skills (aggressive, energetic, driven) that make someone succeed in business and sales. And I have tried. So I can't be the plumber who did not go to university but who charged me fifty bucks just to come and take a look at the pipes for ten minutes, nor be some guy with the fierce handshake and knack for selling cars. I know someone who never went to college but as a car salesman in his 20s, he's making about 60k a year his second year on the job, is married and paying mortgage on a decent house. So given my lack of skills, specifically ones valued by the market, I need to invest in college education. But in order to do that, I need to have goals. Those goals determine the answer to my questions: Do I need to go for PhD vs masters? Should I go in this field or that? How to balance doing something that I love with making good money, enough to reach most of my goals.

I wish the answer was as simple as "doing what you love". I enjoy writing poetry for instance. But what if it never gets published? Do I enjoy sending my poems to hundreds of magazines, with their different criteria, requiring different formats, taking months to get back to me, and the 1% that accept my work, paying me in peanuts? No! Also, I hate not having any money, and I hate bills. Now, the other side of the coin about doing what you love is having what you love: I do love to have a nice car, a nice computer, nice home, to go on vacations, etc. To get them, I may require to study hard, to do some things all day that I hate, but then the payoff is nice. So I have to find a happy balance where I do some things I enjoy during the day (say, help people and make their life better) and of course some things that I hate (say, paperwork, or dealing with upset people), and then in return buy a house--maybe not a great one but a decent one, with a decent car, and also not worry about the bills. House is one. Having a car that does not break down every two weeks is another. I hope this clarifies my intention.

nobody said you're in it by yourself. But a couple's income can reach that quite easily if they are both professional.
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Aug 15, 2009
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Jon Lai wrote:
Nov 20th, 2011 8:48 pm
I forgot to say, as I was typing that, OP reminded me of the Occupy ___ protestors. You want a good life but don't want to work for it. Unfortunately life doesn't work that way.
Wow, I guess we know how you lean politically. I don't get the bashing of this guy when perhaps all he wanted to know was where he needs to set his goals.
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Jon Lai wrote:
Nov 20th, 2011 8:48 pm
I forgot to say, as I was typing that, OP reminded me of the Occupy ___ protestors. You want a good life but don't want to work for it. Unfortunately life doesn't work that way.

Don't start with this propagandizing. The OP is just a regular guy with his priorities out of order. I can understand his need for a long-term plan and some idea of where to go in life in order to get what he wants, but he's trying to run before he can walk.

OP, 33 isn't old by any means. You've still got plenty of time to get the white picket fence and the family.
Could HAVE, not could OF. What does 'could of' even mean?
[OP]
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Mar 3, 2008
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Vancouver
BBBC and Pyro, thank you. Yes, that is all, I am just trying to get my priorities in order and set some goals. This other stuff that some posters mentioned and the comparison with Occupy Movement, which I have great respect for, is just irrelevant.

And Jon, I do have a degree, in psychology. That is why I mentioned doing the mindnumbing filing part time while I was studying and being a research assistant. Unfortunately, a bachelor's degree in psychology is not like one in engineering or computer science. There is no market for it. That's why I'm considering grad school or another degree.

Thanks everybody for your input, I appreciate both the guidance and also the encouraging words.
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Feb 1, 2005
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The 2.4% and 3% mortgage interest rates are unsustainable.

If they do stay that way, we're going to be in a terrible situation like Japan has been for the last couple of decades.

Also, going from 3% to 5% is a huge jump in mortgage payments and both are still, historically speaking, low rates.
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Jul 29, 2007
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If you have any chance of keeping that house through interest rate hikes (a very good chance they'll be high again some day) and with a max amort. of 30 years you'll need to be making 150-200k to afford a house of that size comfortably without a giant down payment. To buy it with a $58,000 job like another poster claimed, is insane, truly, and you will have no security whatsoever. Out of work for any period of time? House is gone. Get sick? House is gone. This is how people go down the road to bankruptcy when they have decent disposable income in our country.

My advice would be to not move to Vancouver, get yourself a decent paying job and determine what you can afford at that point. This whole thread sounds very cart before the horse, and I don't say that to be mean. It's very disheartening to see so many people living beyond their means and seeing them struggle.

Don't be house poor.
Newbie
Apr 20, 2009
51 posts
Vancouver
With Housing being super expensive in Vancouver, it is really hard to own a house or let a lone a condo these days unless you don't mind living in Surrey, Maple Ridge, Delta..etc. I know most of my friends that had bought with their gf or wifes. So dual income is the way the go to afford a property and have a life. But if you really want to buy a $500K home with 30% down would give you approx: $350K mtg with approx $1700/month mortgage which you will need to make gross income of $4K per month is do able. But who has $150K cash laying around these days??? Parents maybe?? ;)
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Jun 9, 2003
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If you're really set on the dream of owning that home (with the white picket fence, etc.), I think you first need to think about where you want to live. Vancouver is probably the worst city in this entire continent for your dream. There are many medium-sized cities or towns in this country where your dream could happen on a modest income. Not in Vancouver, unfortunately.

I'm a professional, a few years younger than you and have been earning a decent salary since finishing school about 5 years ago. I have decent savings, but I'm still not at the point where I feel it makes sense for me to buy a home in Vancouver. Right now, as long as I live in this city, renting is the right decision.

It's a beautiful city to live in, but unfortunately, unless you or your family bought property here many years ago, it's not an easy place to settle down permanently.
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May 30, 2005
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Before I continue making myself seem like an @$$, I just want to say I'm coming out of good intentions, even if I do sound cruel and harsh.
bbbc wrote:
Nov 21st, 2011 1:21 am
Wow, I guess we know how you lean politically. I don't get the bashing of this guy when perhaps all he wanted to know was where he needs to set his goals.
Are you sure? Because I don't know where I lean myself. From the comments you quoted, I sound like a Conservative. However, I'm also for moderate to big governments. I like public services. On another hand, I'm very opposed to having things handed out to people - I believe people should work for their own life, and not be unrealistic. If you know how I should vote, please tell me, because I honestly don't.
aras wrote:
Nov 21st, 2011 3:01 am
BBBC and Pyro, thank you. Yes, that is all, I am just trying to get my priorities in order and set some goals. This other stuff that some posters mentioned and the comparison with Occupy Movement, which I have great respect for, is just irrelevant.

And Jon, I do have a degree, in psychology. That is why I mentioned doing the mindnumbing filing part time while I was studying and being a research assistant. Unfortunately, a bachelor's degree in psychology is not like one in engineering or computer science. There is no market for it. That's why I'm considering grad school or another degree.

Thanks everybody for your input, I appreciate both the guidance and also the encouraging words.

That's good that you have a degree. If you've already been through university, I fail to see why you would want to go through college again. You're going backwards - or so many would suggest.

I think you may be confining yourself when looking for a job. Psychology is one of those things that, like engineering, don't particularly lock yourself into a particular field. Rather, the skills you learnt through that degree is transferable to almost any industry. For example, you can use psychology as a teacher; in marketing; as HR, etc. Having a degree in psychology does not mean your only job is to become a psychologist, which you DO need a Ph. D for. Figure out what it is that you like to do, and do it.

If you're worried about whether those companies will hire you - don't worry, just go for it. Engineers apply for business jobs all the time, even though it's not directly related.

Pick up a job in marketing at a a moderately sized firm and I can almost assure that you'll get at least high 30's to low 40s as a base salary, and if you work your way up from there, with your future wife or spouse, you can work towards that house - it may not be the 500K house you wanted, but you can definitely afford your own place with those numbers. Comfortably.
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Oct 13, 2006
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I moved for almost this exact reason, I couldnt afford to buy a home and couldnt save enough due to high living costs to eventually be able to afford a home. So I made the move to Lethbridge, AB...mostly because I was able to find a well paying job. I'm almost in shock because over here I can almost afford to buy a house with cash, as opposed to Vancouver where my money may only get me a 25% downpayment. Currently, I'm saving with thought of eventually moving back to the lowermainland. Time will tell.

I would suggest OP go to technical school ie BCIT. Since BC has won one of the shipbuilding contracts, maybe do some homework and find out what types of jobs they will be hiring for or spinoff jobs from that industry. Although, labour intensive most of these jobs will pay $25+/hr easy. Is it great no, but you'll be able to work your way up the payscale. Can't always shoot for the moon. The other option I would suggest is a healthcare related field. For example, you could start off as an ultrasound tech but work your way into more specialized training in CT scan or MRI. You may start at $28/hr as an ultrasound tech, but if you are able to do some education while working you could specialize in MRI for instance and make $35/hr+. Just some suggestions.

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