What I don't get is WAY more expensive in places like London, Hong Kong, New York and San Francisco but I don't hear as many complaints or alarms going off in those areas. Why? Is this just me being oblivious?
No one complains about NY, London, HK real-estate because it's already understood to be expensive in the mainstream.
But Toronto real-estate being expensive is relatively new such that you have people who grew up in Toronto not being able to afford it in adulthood.
People are slowly realizing that TO is now just another global city out of reach to the middle class unless you make heavy comprises. Give it some time, and soon people will stop complaining about being able to buy a house with a backyard here as well.
I recently moved from an apartment to a house downtown with a tiny backyard, and it's a huge improvement. We didn't really use it in February/March. But the rest of the time it's awesome.
I think they're a ridiculous pain in the ass and largely useless but that's beside the point -- some people still derive enjoyment from them.
Now, I have family and kids and totally enjoy having it even though I only get to use it 4-5 months out of the year: - kids spend a lot of time there on the trampoline - my wife has an organic garden and beautiful flowers - my dog chases rabbits and squirrels - enjoy being outside without having to go to a park (reading books, playing with my kids) - family gatherings, BBQs and etc
There's no way I'm going back to living in an apartment or even a townhouse with no backyard unless I really have to...
So it has happened here too, but because the beast of London has always been pricey, then it kind of gets ignored, except by those in it and those not now quids in from the crazy prices.
Apparently low interest rates are a big driver. If they increase then many people won't be able to afford their mortgages.
This. You can really see the disparity when looking at the divergence between Toronto rental prices (what people who work can afford to pay with their jobs) and purchase prices (what investors can afford to pay, which probably includes a lot of foreign investment and homeowners remortgaging their homes to invest in a 2nd).
Rental prices haven't increased nearly as much as purchase prices.
Those places have always been expensive to my memory, and I'm not a young man. But Toronto? Expensive? Get outta here! And if Toronto is anything like Vancouver, BC, you get the same expensive housing as (places with which I'm familiar:) Seattle and SV with 60% of the salary.
Also, regardless of the expense, NYC, SF and the like are where you go to get your "big break" or what have you. Sure, you'll pay $2000/month for a closet, but if that audition goes well you'll be on your way. Toronto? Fine city, last I was there. It's not, however, top of my list of cities when I imagine myself packing up to seek my fame and fortune.
And the only people I've heard about Toronto expenses from are my relatives living there, and a few people on the internet.
Whenever I heard about jobs in the big cities, I always hear someone remind people that living expenses in general are higher there, and to be careful of the salaries and what they're really worth.
This has to be one of the strangest complaints, along with shadow flipping, that's come out of the real-estate debacle here in Vancouver.
Builders need to achieve 100% or near 100% sell-through on units in a project. Doing that through a pre-sell is hard, so they've traditionally offered a small discount on pre-sells. Buyers have typically been ok with committing themselves to a pre-sell because of the discount. Everyone's needs are satisfied.
If a pre-sell buyer decides to flip the property immediately, what harm is there in that? Is it that you didn't get the discount? This has exactly no impact at all on the steady-state market price of property; it's just a matter of who the builder decides to give this small one-time discount to.
Worse, it's a distraction from the real reason that real estate has become so expensive in Vancouver and Toronto, which is foreign investment. The BC government imposed a foreign investor tax here and the market is now in a slow-motion collapse; I've been watching about 2 dozen detached houses on realtor.ca and none of them have sold. Some have already dropped their asking price by about 100k-200k and they're still on offer.
If you want a real solution to housing prices, kick out the foreign speculators.
http://www2.jurock.com/articles/columnist.asp?id=9370
But in 2008, worldwide financial markets tanked and with it condo markets in Vancouver. By December 2008, some 200 presale unit owners were offering their contracts on Craigslist - often at a loss. (On March 20, 2012 there were just 39.) When that did not work, many simply did not complete the deal and lost their deposit. Some lost not only their deposit, but where the price of the unit had fallen they were sued by the developer for the difference (developers won in many cases).
Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete.
Also, you then have issues with insider buying/selling etc. It's just not worth the hassle for the developers.
http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-m...
Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete.
So, the pre-sale game changed. But probably for the better.
Builders offer the 'pre-sale discount' because they're trading return for security; they need to sell-through on the units they're building. If a bunch of the pre-sell buyers then flake-out and decide not to pay, the builders are in a hole.
The point that I'm making is that this has no effect on the trajectory of prices; its merely a small discount on the market price for those units. Pretending that this is a key driver of prevailing market prices doesn't help anyone; if the market wasn't already rising feverishly then 'shadow-flipping' and 'pre-sale flipping' would carry more risk and you'd lose money as often as you made it.
But here in Vancouver there are people who are upset that pre-sales sometimes don't include the general public. There are builders who've restricted pre-sales to friends and families, and this is perceived as 'unfair'; when these units do show up on the market, they'll be more expensive than the pre-sale price (of course! they no longer get the discount and the market rose in the 8 months that it took to finish the project!). I think there are Vancouverites who then assume that this difference is cumulative across the market and that it is the cause rather than the symptom of the ridiculous increase in cost of housing here.
The large disparity between local incomes and housing prices is a major reason why there is so much attention on the implications of foreign capital on Vancouver's housing market. It seems like there hasn't been as much concern or interest in Toronto, but there probably should be.
[1] http://www.theglobeandmail.com/real-estate/for-vancouver-hou...
http://www.theglobeandmail.com/real-estate/vancouver/out-of-...
http://www.theglobeandmail.com/real-estate/vancouver/canadia...
http://news.nationalpost.com/news/canada/chinese-police-run-...
It's just like the market collapse back in the late 80's when interest rates climbed into the double-digits; no discretionary seller wants to lower their price from $1.3 million when that was a feasible offer 2 months ago, but no one wants (or rather no one is left) to offer that price. The market just seizes and eventually non-discretionary sellers are left to define the market.
It won't make any difference at all to the dozen or so billionaires who are looking to buy their Nth house in Vancouver. But it has devastated the detached housing market below $5 million here and that will ultimately put pressure on condos and townhouses. I think the only reason it's working is that TO and Seattle don't have a similar tax; Vancouver has made itself less attractive, but only marginally so.
There's basically four major cities a Millenial would consider: Vancouver, Toronto, Monteal, and Ottawa. (And I've heard the latter crapped on even by Canadians.)
Montreal is lovely, but if you're an Anglophone.
Compare with the United States: New York is a large city, but I could live in Philadelphia if I wanted to go slightly cheaper. If Seattle is to expensive, there's Portland.
It seems to me that basically everyone who wants to live in the "big city" seems to either cram themselves into Vancouver or Toronto. (Ottawa didn't seem to have the level of bustle I'd expect for a capital compared to say, London or DC)
So basically, the TL;DR is people in NYC or SF choose to be there. You basically pick a climate, then pick a price range.
There's not much call for my particular skill set, unfortunately. I interviewed for a position in Google X, but it was a very strange interview and I didn't get past that, despite giving a very thorough answer for the pre-interview problem they posed.
A big problem I have now is that I'm overqualified for a lot of jobs. Getting another grad degree probably won't help. To be honest, if I was to get a CS degree, I'd probably go straight for the Ph.D. instead. There's some things in computer graphics I'd love to explore. Unfortunately, the prof I'd want to supervise me left and is now working at Intel last I checked.
As a German I think it is beautiful that moving to Austria or Switzerland is basically the same as moving inside Germany. Depending on where you live, the cultural differences inside Germany might even be higher.
After that there are the English speaking countries, with a low language barrier, then the countries with very high English or German fluency (Netherlands, nordic countries etc.), which would make it easier in the beginning and the South, mostly chosen by the elderly to go on permanent vacations.
When the East keeps growing economically, it might become another great option, even for people without global customers. There are some culturally interesting cities with a good standard of living and dirt cheap prices.
I would advise Americans and Canadians to create something similar, it is great.
I've lived in Ottawa and it's big selling point for me is the various national museums. I used to love going to the National Art Gallery simply because of its architecture, but I did see an excellent retrospective on Escher (including a presentation by a guy who tried to take picture of places where Escher did drawings of) and one on Renoir's portraits. Skating on the canal is pretty big in the winter in Ottawa. A friend of mine commutes to work by skating on it. You're right in that it's not as busy as London or DC, though. I consider that a plus, but that's just me.
Montreal is beautiful, but you'd better learn to at least attempt French as you'll be treated better by the shops and restaurants for it. Other pluses are: the jazz festival, the comedy festival, and the F1 race. My sister and her family moved there in January as their jobs in Toronto were being phased out.
Some places have been very expensive for generations, so it has been normalized.
Those articles tend to stay in the UK though.