$2.4M ‘knockdown’ sums up Vancouver housing market

Click to play video: 'Modest shack in Point Grey selling for absurd price'
Modest shack in Point Grey selling for absurd price
WATCH: For sale: teardown in Point Grey. Asking price: are you kidding me? Jennifer Palma reports – Jan 29, 2016

VANCOUVER – It’s missing a few shingles, the bathroom wall shows some rot and it needs a paint job, but a tiny home in a tony Vancouver neighbourhood has been listed for nearly $2.4 million — a price experts say sums up the state of the city’s housing market.

The new listing by the Kavanagh Group features photographs of the three-bedroom, two-bathroom house built in 1930.

The description posted online Thursday lauds a mid-block home in the Point Grey neighbourhood, with a mountain view on a cherry-blossom tree-lined street. The lot is about 10 metres wide.

But a veteran real estate agent not connected with the listing called it a “knockdown.”

“It’s not unusual, that price point, for its lot value. Whether the home was 40 years or 80 years old, doesn’t really matter,” said Ken Wyder, with Remax Select Properties, who has sold homes in the area for 15 years.

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“The house is incidental. It’s a small part of the equation.”

The listing agents said they were hired to market and sell the property, and would not be giving interviews.

Housing affordability has been a hot-button issue in Vancouver and the surrounding region in recent years as bidding wars have erupted and property values skyrocketed. The average selling price for a single-family home on the city’s west side is above $2.5 million, according to recent data from the mayor’s office.

READ MORE: Vancouver ranked 3rd least affordable housing market in the world

The scorching conditions prompted British Columbia Premier Christy Clark to hint last week her government will also address housing relief for first-time home buyers when it delivers its budget next month.

Wyder said there are still hundreds of similar homes on the city’s west side, and about 90 per cent of those are selling for property value alone.

The price is typical in the extremely volatile market that is changing weekly, he added.

An open house is planned for next Tuesday. Wyder said when he sold a similar home a couple weeks ago, most offers came without buyers doing anything other than driving by the lot.

“This property will likely bring in multiple offers over $2.5 million.”

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Thomas Davidoff, a housing economist at the Sauder School of Business, agreed the public should disregard the run-down home and understand the buyer will be paying for the dirt.

“A home builder knocks down what’s already there and builds a tricked-out luxury mansion and sells it to some rich guy,” said the associate professor to describe the situation.

He cited the low Canadian dollar and said it doesn’t take a rocket scientist to recognize money from overseas may be playing a role in hiking the prices.

Davidoff recently joined a group of real estate experts to propose a 1.5-per-cent tax on vacant residential properties, called the Housing Affordability Fund. Its goal is to generate up to $90 million in surcharges from vacant homeowners.

READ MORE: B.C. wrestles with ways to cool housing market

“The good news is this is a really attractive city, people really want the land here,” he said.

But such prices are beyond the reach of a huge fraction of people who live and work in the city, he said.

The benefits of the housing demand are not being distributed properly, which is why the group has proposed changing the tax code.

The new listing generated buzz and complaints of “crazy” and “insane” on social media on Friday.

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“A $2 million bill for a not great house? You see it and you’re like, ‘My god, if that’s what a piece of garbage goes for,'” Davidoff said. “That’s very dispiriting to people, for sure.”


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