Another week, another Vancouver real estate anecdote causing an uproar.
A home in the 3500 block of West 1st Avenue was sold this week for $4.23 million – $735,000 more than its asking price of $3.5 million, and more than $1.5 million over its assessed value.
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The home’s realtor refused an interview with Global News, but said the buyer and seller were both locals. But the skepticism of neighbours is part of the increasing worry by locals that they can no longer compete for real estate in Vancouver.
“That’s a lot over asking, but not unusual in the market today,” says RE/MAX realtor Jamie Stewart, who believes the low dollar has contributed to Vancouver’s real estate market reaching new heights in recent months.
“There was a real flurry over Chinese New Year. I think the potential risk of the future devaluation of the Chinese dollar and our currency coming off has made Canada a great investment,” she said.
“We’re wonderful, clean safe city. We’re known as a safe country to invest in.”
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“We may be transitioning from a largely Canadian local economy to an international global city,” says Thomas Davidoff, a housing economist at UBC’s Sauder School of Business.
“So prices from a couple years ago may not come back. That said, there’s a tremendous risk of a crash at prices like these.”
In the last five months, the average price of a single-family detached home in the Greater Vancouver area has increased by $420,000 – as much as it did in the past five months as it did from 1981 to 2005.
“Forty per cent ago, nobody said Vancouver was too cheap. We were worried about affordability when prices were massively lower than they are today,” says Davidoff.
“Could prices fall 30 or 40 per cent? Of course that’s a real possibility. But I wouldn’t say the most likely outcome.”