“I graduated last year and got a stable government job and my gf is a chef. We’ve saved up about 50K for downpayment, and we just put an offer on a condo by Gilmore station for 430K. It looks like we’re going to get it. We plan for this condo to be both an investment and a home for at least the next 7 years.
We both grew up in Richmond, and as much as we love the place, there are inherent issues with the city. Most importantly, its housing market is based on one factor – Chinese investors.
The housing market in Vancouver is strongly influenced by investors from overseas, mainly China, Hong Kong, Taiwan. Earlier this year, policies were tightened for foreign investors, in most cases from China. Money was actually returned to them. This means that the development on River Road in Richmond by the Olympic Oval is undersold. Now housing prices are dropping like crazy in Richmond after a 5 year boom, not to mention the crawling speed of the market as well.
My company will be moving next to Brentwood mall soon, and this is one of the reason why we’ve decided to move there.
More importantly, the plan to develop and rebuild and revamp Brentwood mall is a good sign, including the three phase project – the first of which includes an ultra high rise. Needless to say, with an increase in population in the area, housing prices are expected to go up in the future.
We almost bought a similar place for 20K more last month, I’m so glad we didn’t because the prices has dropped a little. But there are not a lot of options because sellers who are not in rush simply took their property off the market.
Here are the questions I have:
Is it possible that there will be too much property for sale that dilutes the value of property as a whole in the future? For example, both Brentwood and Oakridge malls have plans for a ton of new homes in the future (both 3 stage projects).
What are other factors that might affect property value in Burnaby and in Greater Vancouver as a whole?
Finally, I’ve heard that housing in Vancouver, as long as it is close to Downtown, UBC, or Vancouver itself, will always be saturated. Can this always remain true if there is such an abundance of developers creating new condos?
Everything considered – what do you expect a 400k-ish condo in Burnaby to be worth on the market in 5-10 years?”
– ‘Reddit, I need your opinion about something as I’m about to make the biggest purchase of my life’, shaozhen, reddit.com, 31 Oct 2012
The fact that they see the home, even in part, as “an investment” makes them speculators.
They are buying on the premise that prices will rise or at the very least remain strong.
To answer their last question: I would say that their $400K condo will touch a market price of $220K (real) well before it ever hits $440K.
Would they be buying if they saw that possibility?