Issue 16 – October 2012

GREATER (METRO) VANCOUVER

OCT 2012 QTLY UPPER-TIER REAL ESTATE UPDATE

AT A POSITION IN A CYCLE

The headline this quarter is used in a somewhat ‘tongue in cheek’ way. As in, “when are we not at a position in a cycle?” The emphasis here is surely on the fact that ‘cycles’ become a topic when the circumstances we find ourselves in, are not to our total satisfaction and we need assurance that the ‘pendulum’ will return to the more desirable position. As a matter of interest, can you remember many communicators identifying what most would identify as a ‘desirable position’ for the purpose of reinforcing the inevitable reverse swing?

Upper end residential real estate is not immune to these cycles, although, as we have addressed before, those players with more significant financial resources are generally less vulnerable to the urgency brought about by the need for immediate disposition. Also, too, they are not as limited as the less financially endowed, by the inability to acquire real estate (or additional units) than say, the important sector of ‘first-time buyers’.

Consider for a second the impact of a cycle, such as the present one, on recreational real estate (generally a discretionary acquisition). Look at the softness around this province in places such as Vancouver Island, the Gulf Islands, Whistler and the Okanagan. Clearly, the demand has subsided and the sales that are being transacted are in large part at lower price levels than prevailed at the height of the preceding cycle. The fact remains that the confidence to buy affects all groups of buyers, even those with more significant wherewithal to buy. “Confidence” is the key here and this generally returns concurrent with the belief that the market has started to rebound.

Now the third quarter 2012 figures extracted from the REBGV database.

Detached homes sold [$2MM and above] 2012 – 197 listings sold vs. 2011 – 312 sold (a decrease of 37%). Highest sale $16.167 MM (’12) vs. $10.3 MM (’11). This property – at 1988 Drummond Drive, Vancouver, sold in Sept ’12 after 228 days on the market, originally listed at $19.6MM, 4 bed/8 bth, it is a 12,184 sq ft structure on a 65,433 sq ft, W facing property with 10 car garage – A 5 year old Pt Grey masterpiece, tax assessed at $11.2MM. Indeed a home of provenance.

Attached homes, those best described as townhomes and duplexes, [$1MM and above] 2012 – 45 units sold vs. 2011 – 68 sold (a decrease of 34 %). Highest sale $4.28MM (’12) vs. $3.15MM (’11). This property, at The Erickson (Homer Mews) in Yaletown, which sold in Aug ’12 after 117 days on the market, was originally listed at $5MM. A unit with unobstructed False Creek views, 3bd/3bth with 2,502 sq ft of living space. A spectacular 2 yr old semi-waterfront townhome (tax assessed at $3.7MM) – one of a kind.

Apartments [$1MM and above] 2012 – 76 units vs. 2011 – 127 sold (a decrease of 40%). Highest sale $6MM (’12) vs. $10.1MM (’11). This is a spectacular refurbished and fully furnished 38th floor Aquarius penthouse (the entire floor – 5,234 sq.ft.) 3 bed/7 bth apartment with panoramic 360 degree breathtaking views (incl 4 car pkg). Listed originally at $7.45MM, it sold in Sept ’12 after 96 days on the market. Note – larger than the attached sale above and all ‘on one floor’ – unit 3801 & 3802 combined.

Here again are the current inventory (listings) figures:

Detached ($2MM and up) 1404 – Highest $37.9MM * – 48 at $10MM plus
Attached ($1MM and up) 206 – Highest $8.96MM** – 11 at $3MM plus
Apts ($1MM and up) 436 – Highest $28.8MM*** – 5 at $10MM plus

* W/front, view West Van estate marketed as 3way subdividable ppty
** 8243 sq. ft. fully restored Shaughnessy half duplex – 3437 Osler St
*** Penthouse 1 at Fairmont Pacific Rim 3bd/4bth, 2 lvl 6434 sq.ft. over 400 days on mkt

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 21% (year over year). Attd by 44% and apt no change.

It will be of interest to see where sales activity in the upper tier moves during the final quarter of this year. It is unlikely that we’ll see an increase, if any, before next 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 offering 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

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