Monthly Archives: October 2011

Issue 12 – October 2011

GREATER (METRO) VANCOUVER

OCT 2011 QTLY UPPER-TIER REAL ESTATE UPDATE

THE TREND CLEARLY CONTINUES

We began this year with a comment (headline) proposing that demand for our upper end real estate, from outside of Canada, was appearing to be significant. Reference was made to the evident presence of mainland Chinese buyers joining the traditional European and Middle Eastern group. While that European and Mid East presence is still here, Greater Vancouver must now acknowledge that the Chinese buyer currently outnumbers all others. The question has been asked, are these non-resident offshore investors or immigrating buyers? A good question and while we all have our opinions, difficult to categorically answer. To be more definitive, we will have to wait for some years (we feel at least five). One argument cites the Hong Kong buyers who sold and returned to Hong Kong after the hand back of the Island by the British on July 1, 1997. No, there was not a wholesale divestment at that time, or since, but clear evidence of some resale. This city, and especially areas such as Richmond, continues to show the significant impact of that in-migration and continuing investment. We are, and remain, a safe haven for investment from afar.

While the toughness of current economic times will undoubtedly reduce the overall number of real estate transactions, our belief is that this upper tier is less affected by that ‘shrinking’. Indeed, the percentage will likely be a fair bit less. We also see that the players at this end of the market are less constrained by the oft touted argument of affordability. This, of course, is a significant consideration when one talks of ‘first time buyers’ without much in the way of down payment and clearly no equity from the sale of a former residence. Demand at the upper end is usually backed by significant equity and often by substantial other financial assets and cash flow. The other contributor buoying this demand is the relatively low cost of borrowed money. Also consider that the “retired” group display a higher degree of urgency regarding these retirement/recreational needs than those younger folk embarking on acquiring starter and subsequent housing. Yes, demand is certainly evident in this more mature sector and patience less of a virtue.

Now the third quarter 2011 figures extracted from the REBGV database.

Detached homes sold [$2MM and above] 2011 – 312 listings sold vs. 2010 – 170 sold (an increase of 83%). Highest sale $10.3 MM (’11) vs. $8.2MM (’10). This property – on 31st St, Altamont (WV), sold in Aug ’11 after 80 days on the market, originally listed at $10.888MM, 6 bed/7 bth, it is a 6,898 sq ft structure on an 18,140 sq ft, gated, S facing property – A six year old waterfront mansion.  Truly a home of provenance.

Attached homes, those best described as townhomes and duplexes, [$1MM and above] 2011 – 68 units sold vs. 2010 – 48 sold (an increase of 41 %). Highest sale $3.15MM (’11) vs. $2.85MM (’10). This property, at Aquarius Villa, in Yaletown, which sold in July ’11 after 55 days on the market, was originally listed at $3.288MM. A unit with unobstructed marina views, 3bd/3bth with 2,474 sq ft of living space. A spectacular semi-waterfront townhome – one of a kind.

Apartments [$1MM and above] 2011 – 127 units vs. 2010 – 96 sold (an increase of 32%). Highest sale $10.1MM (’11) vs. $4.35MM (’10). This is an ultimately luxurious 40th floor Shaw Tower (the entire floor – 7450 sq.ft.) 7 bed/7 bth apartment with panoramic 360 degree breathtaking views and 8 parking (incl 3 car private garage). Listed at $15.5MM, it sold in Sept ’11 after 123 days on the market. Note – larger than the detached sale above and all ‘on one floor’!

Here again are the current inventory (listings) figures:

Detached ($2MM and up) 1158 – Highest $25MM * – 38 at $10MM plus Attached   ($1MM and up) 143 – Highest $5.78MM – 7 at $3MM plus Apartments ($1MM and up) 434 – Highest $28.8MM** – 4 at $10MM plus

* Belmont (Pt Grey) 11,000 sf 8bd/8bth. Over 40,000 sf  “majestic” res  ** Penthouse 1 at Fairmont Pacific Rim 3bd/4bth, 2 lvl 6434 sq.ft.

Note: We do not place too much store on “asking” prices, as the only true measure of a market is a “sale” price. These are however included because they are obviously of interest.  It does underline the fact that unique properties are often challenging to price and, that, in certain markets, very few of these offerings are sold. Note: the number of detached listings has risen by over 60% (year over year).

It will be of significant interest to see if sales activity in the upper tier is maintained during the final quarter of this year.

Again, visit the website to see the new developments.  We continue our commitment to keep you up to date on Vancouver’s www.HomesOfProvenance.com – the “go to” site for Upper Tier Real Estate analysis and jumping off point for market listing information.

To join the group getting the e-mail version of this “update” – send a request now to info@HomesOfProvenance.com and you’ll be assured receipt; phone us at (604) 626-2526 or visit www.HomesOfProvenance.com