A Vancouver real estate agent is putting the spotlight on how speculators can rapidly drive up prices for homes in the region.
Steve Saretsky, a realtor who also runs the website Vancity Condo Guide, penned a blog post earlier this week after digging into MLS sales data for homes sold on the west side during May 2016.
He says what he found sheds some light on just how quickly some homes are appreciating.
Looking at a detached home at 6712 Adera St. in the neighbourhood of South Granville, Saretsky found it had changed hands four times over the last two years and went up in price from $5 million in January 2014 to $7.6 million in May 2016, an increase of just over 50 per cent.
He also found that of a total of 179 homes on the west side of Vancouver that sold in May, 28 had already been sold at least once in the previous 12 months.
The average profit made on each of the 28 homes? A cool $1.14 million.
But the price increase isn’t due to high-end renovations; Saretsky says he compared photos of the 28 properties from each listing and could not detect any noticeable improvements or upgrades between sales.
With the discourse around Vancouver real estate and foreign investment often heated, it is easy to assume offshore money has something to do with the quick flips — but Saretsky says he has heard otherwise.
“I don’t think it’s necessarily foreign, I think that’s a part of it, but it’s also just local speculation,” he told Global News.
“I’ve heard from a lot of people who work nine-to-five jobs and are just looking for a place they can quickly fix up and flip.”
As for how so many locals are collecting enough capital to even start off in the house-flipping business, in a city where the average price of a home is $1.74 million, Saretsky says a lot of his clients are taking out multiple mortgages on their current home in order to purchase an investment property.
“I don’t think it’s necessarily your typical savvy investor, just regular people taking advantage of the situation.”
And for those able to take advantage, there is a considerable amount of money to be made.
In the last year, detached property prices soared the fastest in Tsawwassen, at an increase of 48.2 per cent. At that rate, a $2 million home would have increased in value by over $2,600 a day.
Regardless of where the money is coming from, Saretsky calls the situation as he sees it: people trading Vancouver real estate “like it’s a cheap penny stock.”
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