Pique'n'yer interest 

Return to housing sanity

I bought into Whistler employee housing in September of 2006, probably either the first or second person to buy in following the decision to change the rate of appreciation from the Vancouver index to the Core Consumer Price Index. I knew what I was getting into, and what I was potentially losing by purchasing a house that will only realistically appreciate two to three per cent a year ­— well below the over 5 per cent interest I’ll pay into my mortgage.

In one year my house will have appreciated around $7,000, while I’ll have paid the banks around $14,400 — only $4,600 going towards the principle. In other words, I paid about $9,800 in interest, which is only slightly more than the $9,600 my wife and I used to pay annually in rent — not including property taxes.

However, when you include the appreciation of the house — assuming we ever sold and got what we asked for — we only paid about $2,600 when you subtract the principle.

The situation will continue to improve over time as the amount of principle we pay starts to add up, and the amount we pay in interest decreases. As long as inflation doesn’t go backwards, our home should also increase by a modest amount annually.

In the same year my house appreciated $7,000 under the CCPI, some houses in my complex — still tied to the Vancouver market — increased by close to $50,000.

Now some of the owners of those houses are selling, and can’t find anybody out of the 671 people on the housing waitlist interested in buying at that price. As a result they’ve taken it upon themselves to sell to people off the waitlist, but it has been slow going. They have turned down offers below the maximum resale value, and are holding out for the full amount.

I can’t blame them for this. When someone tells you your house is worth $375,000, you’re going to think twice about selling for $325,000. That’s a lot of money, and compared to places like Vancouver the higher number is still quite reasonable.

I also can’t blame people on the waitlist for not buying. It’s a lot of money, and will likely be more expensive per square foot than several housing projects on the horizon.

People need to be realistic, especially when they watched their homes increase in value by 60 per cent or more in the last five years.

First of all, those homes were not supposed to increase that much. When the decision was made to tie WHA homes to the Vancouver market, the projected appreciation was one-to-three per cent a year. And still you bought in.

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