‘Advice?’ at vancouvercondo.info April 15th, 2011 at 8:31 am – “My uncle and aunt have decided to sell their long-time home in Quilchena. My cousins have all moved out and in the current market they can get about $3.5 million just for their large lot. They are well to do but it’s a lot of money even for them. $3.5 million, after tax, would have been at least a couple of decades worth of earnings for them when they were still working.
They are looking for ideas about where to invest the proceeds SAFELY. They may [now] rent in which case they will have $3+ million to invest or they may buy something relatively modest in which case it will be more like $2.5 million. Either way, that’s way more cash than they’ve ever had and they don’t really know what to do with it. They’re worried about inflation but also very worried about a burst of the China/commodities bubbles. These seem like contradictory worries. I’m going to suggest that they buy a winter home in Arizona to start but that’s not going to cost much so it won’t solve their investment problem.”
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this whole story seems screwy…. “My uncle and aunt have decided to sell… they can get about $3.5 million just for their large lot” whoever started this post is speculating on a future sale of this property and you have a cart before the horse…
Why worry about these gains when it might sell for 1 mill…. in 3 years time…. and where is Quilchena? and what will make me want to shell out over 3 M to live there??
Quilchena is part of the Westside, in the Dunbar/Kerrisdale area.
The story itself doesn’t sound at all screwy; comps have been selling in that price range.
What is screwy is that homes/plot prices have risen to that level at all; they are vastly overpriced. Nothing would make you or me shell out $3M to live there, but places are still selling to some for those prices.
I’ve lived in Quilchena for more than 30 years. The area is in the middle of the west side – approximately one square km. of land located between King Edward and 37th Avenues (N & S) and between the old interurban line and Puget/Larch (W & E). The surrounding neighbourhoods are Shaughnessy to the east, Kerrisdale to the South, Mackenzie Heights to the West and Arbutus Ridge to the North. The area between 33rd and 37th – both east and west of Arbutus – have some great views, as does Puget Drive and the streets along that hill.
The lots in this area were large for a few reasons – 1) a lot of water comes down those hills when it rains and the area once contained the heads of the largest stream system in Vancouver (the MacDonald stream); 2) the hills are steep so many of the lots were hard to build on; and 3) the lower area (just north of Prince of Wales School) used to be a swamp and has a very high water table, so the larger lots allowed for more area for water absorption.
Recently this area has become a favourite of the Chinese immigrant investors, probably because of its proximity to Prince of Wales School. They are buying up the older homes at ridiculous prices, and tearing them down to build their oversized $3 million McMansions. One street (Brakenridge) has had half of its homes replaced in the last 18 months
and currently two more FULLY UPDATED AND RENOVATED homes on that street are awaiting demolition. It’s sad to see such nice well built family homes being destroyed and replaced by housing that is completely beyond the means of most of the people working in this City.
This area is being destroyed thanks to the City’s continual increases in the floor space ratio, without any requirement that these larger homes have more than one living unit. When the original houses were built, the FSR was .35; now it is .7 PLUS a 750 sq. ft. “laneway cottage”. Yet most of the new homes only seem to have one very small family living in them, so the increased living space is for “bragging rights” rather than necessity.
‘Quilchena’?… Don’t know about the YVR ‘hood’ – but the hamlet, mid-way up the Eastern shores of NicolaLake on the 5A (between Merrit/Kamloops) is some of the best motorcycle riding in the province (repaved to LagunaSeca MotoGP standards last Summer and not far from the DouglasRanch – home to a ‘dying breed’; last of the RealCowboys)… Investment advice? Beware of falling rock.
You want some advice? Don’t ask for advice on a RE bear blog.
Next.
Good advice blammo.
I would agree that folks should not seek investment advice from any real estate blog.
The anecdote is largely of interest because a couple is selling their PR on the westside of Vancouver for an amount that quite literally flabberghasts them.
I do enjoy your blog, however. The host and its commenters are on the whole quite smart and with whom, I generally share a similar philosophical outlook.
Yet, I am RE agnostic. I prefer to let the market tell me what is what. No doubt, we are currently over priced. I’m just not sure how much.
Sure are a lot of people that wish prices were lower. I do know that.
blammo -> Thanks for the comments.
The trouble with letting markets ‘tell you what is what’ is that it is a rearview approach… and one gets paid for anticipating where a market is going, not for waiting for it to tell you where it has gone.
However, I do note that when you say that the market is ‘overpriced’ you’re doing a bit of prognosticating yourself, and are perhaps not completely agnostic…?
Gold, Silver, Commodities, and RE in places that will withstand the political and social upheavals of a collapsing financial system.
Honest question: what commodities run up in history did not result in a recession and a plummet in commodity prices?
I’m looking for dates. Thanks.
Owning RE if you expect in inflation is a no-brainer. I’ve been thinking lately that the pendulum has swung too far the other way on attitudes and risk assessment. Of course with 5 year resets like Canada tends to have, this inflation hedge is a little harder to calculate than it is in the 30 year fixed rate world of the U.S. If I had to buy in Canada, I think I’d pay the premium for a 10 year fixed.
nice dilemma to have…what should we do with all this money?
Seems to me that a couple of empty nesters who’ve probably invested some for retirement already could live out their years pretty nicely even if they stuck the proceeds, as Garth says, in the orange guy’s shorts.
Still, I suggest whatever they do, they really diversify. A nice mix across investment vehicles, market sectors, and foreign investments. Go with a self-serve account as much as possible, so that they’re not paying crazy management fees, but don’t get caught up in any one area. Where possible & knowledge allows, hedge.