The Value Of The Dirt? – “In condo crazy Vancouver, downtown’s last gas station for sale”

“If you look at the value of the dirt, there’s just no possible way that just having a stand-alone gas station makes any kind of sense financially,” Tsur Somerville, director of the University of British Columbia’s Centre for Urban Economics and Real Estate, told CTV Vancouver.

Downtown Vancouver’s second last gas station was recently sold to a development company for a staggering $72 million. That sale prompted the owners of Downtown Vancouver’s last gas station, an Esso located at the intersection of Burrard and Davie Street, to put their property on the market too.

And while that may be good news for condominium developers, Stephen Regan, executive director of the West End Business Improvement Association, says that selling the station will come with consequences.

“Losing a gas station, and possible the last gas station in downtown, is going to have some significant impacts, I think, for locals and for visitors,” he said.

– from ‘In condo crazy Vancouver, downtown’s last gas station for sale’, CTV, 14 April 2017

The fact of the last fuel station in downtown Vancouver, here for the record.
BTW: If we were to make all decisions about what’s important in Vancouver based on the “value of the dirt”, where would that lead?
If we were to make all decisions about what we do with our lives based on maximizing income per time unit, where would that lead?
In a related sense, how does one measure success?
– vreaa

70 responses to “The Value Of The Dirt? – “In condo crazy Vancouver, downtown’s last gas station for sale”

  1. Request to all commenters: Less bickering and name calling; More actual discussion. Give it a try!

  2. So, 10 years after selling my condo, I’ve finally bought back into the market. My family situation finally needed the stability of ownership.

    You know the saying “The market can stay irrational longer than you can stay solvent”? That’s how I feel. After the introduction of the foreign buyer’s tax, I was hopeful that this would be it– the catalyst for the big decline. Houses started to pile up on the market, sales slowed dramatically.

    But no, the collapse hasn’t materialized.

    In my Richmond neighbourhood, house prices are down quite a bit from the 2016 peak, but not nearly as much as they need to fall for me to be able to afford, and their prices have stabilized– lot-value houses are selling at $1.2-1.3M, and decent houses are selling at $1.4-1.5 (and they sell quickly). Townhouses are all over the map– nice stuff sells FAST, and at/above 2016 peak prices (in some cases- 20-30% above the 2016 peak). Old stuff sells slowly, at a bit below last year’s peak. Condos are still rising.

    I still think the market’s going to collapse HARD one day, but the only question is “when.” Will it be this year? No. Next year? I’m not feeling it. How much farther in the future will it be? Farther than I’m willing to wait, so I’ll have to make do with a condo…

    • The tax was introduced just last summer–you were expecting a market that has risen ludicrously high over a period of 10+ years to collapse in the space of a few weeks/months? Your call is directionally right, but this gas bag is going to take years to deflate, and possibly decades to recover.

      • No, I wasn’t expecting a collapse so soon– but I was hoping that the market might clearly become stabilized, or start a slight downward trend, or at least build up some reasonable level of inventory. Something to show that there would be reason to wait it out. But no. Condo and townhouse inventory at least at tight as last year, prices more-or-less the same (maybe higher). Houses down slightly. No real hope in sight.

    • Free advice: never look back and enjoy the lifestyle.

    • Sorry to hear M. To the bears, what did I say about not buying similar to shorting the market? Exhibit one.

      Ninja, “but this gas bag is going to take years to deflate”, ummm… do you want me to dig up that quote from you in nov 2015 where you are like, I am confident this crash will happen within 1 to 3 years? Tick tock, back tracking real fast my friend…1.5 years to go before the big one blows right? what was it 50 to 75 percent off of nov 2015 prices?

      • If you look at the U.S. experience, the crash itself occurred reasonably quickly (though not in the timeframe that M was hoping). However, it continued to slide for years in real terms. I don’t see why Canada wouldn’t follow a similar path of steep declines followed by milder deterioration + slow recovery.

      • Sure, I am not discounting the idea that what happened in the US can’t happen here. I don’t like the odds but obviously you do. I think it bears repeating that one of our biggest differences is the premise with which we evaluate the problem. I should thank M for stating his case here because it illustrates the case that I am most interested in. You keep on stating that vancouver real estate is a bad investment. I actually do not have a strong opinion on this believe it or not because it is actually quite irrelevant to me. I believe that the current runup in attached prices is foolish and I have never made any claims on how I think attached will perform. I only believe in Vancouver land, not its houses as to simplify the scope of the issue.

        But, what I am far more interested in are people like M’s case. These are more relevant to me. If I was a complete bull like every sense of the word I would be leveraged to the max and own several properties. I do not. But, at the same time, I also have to think like M has and make sure that family situations are not untenable. Which is why I keep on harping on the idea that timing is crucial as M’s case has shown. Also why I keep on pressing you for timelines because in most people’s case, the timeline is just as important as the prediction. From this perspective, my own evaluation of upside risk in the particular sub-asset class in Vancouver shows that the upside risk is not worth the bet on the downside and there are too many variables on the upside which could hurt me. This is similar psychology to holding a short position. If you look at what I have said, it has been quite specific to this precise issue.

        M: it takes a lot of courage to write what you wrote. Best of luck to you btw. We got to do what we got to do to keep our family happy right.

      • Can anyone make sense of these verbal gymnastics? Three paragraphs, nothing actually communicated.

        Your wishy-washy, “could go up, could go down” pontifications are boring. Take a position, man.

      • Hmm.. I thought you of all people should know my position quite well. It is stated explicitly in our bet:

        Mine: “Detached homes in Vancouver, Burnaby, Richmond and West Vancouver shall have a higher price in a 1 to 3 year term (you defined the term btw) than the day we made that bet (november 2015).”

        Yours: “Detached homes in Vancouver, Burnaby, Richmond and West Vancouver shall crash by 50 to 75 percent in a 1 to 3 year term (you defined the term btw) than the day we made that bet (november 2015).”

        How is that wishy washy. Realize I made not mention of apartments. Also realize I made not mention of other regions. You keep on asking me of my investment thesis. Let me ask you, what is yours?

        Btw, one interesting fact. I remember you saying that everything is over valued so they are will likely all fall. So say if I feel that everything is grossly overvalued with the S&P right now (that is debatable but for the heck of this argument say if that was the case), should I just go and short any stock that has a ridiculous P/E on that index?

      • @vreaa, I just replied to Ninja, how come my comment is awaiting moderation?

        [Brian – just saw that now and ‘approved’ it… sometimes no rhyme or reason to what gets held back in wordpress.. perhaps filter thought you were selling something. -ed.]

  3. London has 350 gas stations, including some very nice neighbourhoods. Perhaps Vancouver city planners could learn from them.

    http://www.answers.com/Q/How_many_petrol_stations_are_there_in_London

  4. I attended a dialogue at SFU downtown, featuring Mike Harcourt and Gregor Robertson being interviewed. Harcourt spoke volumes about stopping Vancouver from being a freeway city, and stopping a massive development of ALR land in Delta. He and Robertson peppered their dialogue with “livable city.”

    I think that downtown Vancouver is a widely admired, well studied example of not having a freeway, and a place where all kinds of people have made a home. Great advantage has been taken of the spectacular setting with the seawall. There is much to be proud of in our city.

    I can’t help thinking that despite all the great planning and hard work that has gone into Vancouver, the highly publicized loss of gas stations points to some fundamental issues that never were addressed. First, if you’re not going to have freeways, you need world class regional transit. Long way to go there.
    Second, housing unaffordability – much that could be done, hasn’t been done. Third, the fact that the various crises in the DTES are worsening. Fourth, every neighbourhood needs a proper commercial district with basic services. Commercial Drive and Main street should be norm, not the exception.

    Vancouver starts to get pretty awesome when you earn 100k or more. With median FAMILY income in the seventies, I’m glad I’m not a thirty something with serious family roots in this city wondering whether to start over. Sadly the politicians are too removed from the realities of ordinary people to have urgency on their concerns.

    • Hey man, why do you have to worry like this… don’t worry.. .this will all correct itself.. we will crash and we will crash hard. What is there to worry about, the average 70K guy will be able to buy that detached house or at least something above 3 bedrooms in about a few years anyways. Just be patient.

      I think you are just missing some bears at your conference cause they will make everyone feel very confident that a crash is coming so we are all basically wasting our time debating solutions because it will take care of itself.

      • Brian, I have spoken to many real estate bears over the years, I must say in recent times they sound much less sure of themselves. Perhaps the sign of a market top?

      • Maybe, who knows. I can see why the bears are less certain, that’s what happens when you have been shut out of a rising market for a decade. I think if you are betting that way, you should just keep on betting that way, have some conviction.

  5. 2712 Pandora St: lipstick renoflip – bought May 19, 2016 for $1.295M – listed at $1.588M, a $293K bump in 10 months. There is no soundbreak whatsoever between the newly installed basement suite and the upstairs – it will be like living inside a guitar’s soundbox – you will be able to hear the landlord fart. It is a head thumper basement – as high as a fridge; as high as a stacked washer/dryer – but you’ve also got those knock-you-out beams to contend with. Better be short if you want to live here. Vegas odds of it being a legal install. A depressing domicile – no amount of white paint is going to change that. Decent location though.

  6. https://www.raisethehammer.org/article/1427/a_distant_mirror:_40_years_of_urbanism_in_vancouver

    However, in the early 1970s Vancouver made a fundamental choice that was to determine its future development. Vancouver refused to build a freeway system through the downtown core. It is now the only North American city without a freeway.

  7. So why can’t the city simply require a gas station in the new development? Is not like the gas station can’t replace the ground level commercial units.

    Also, if everyone in downtown is supposed to be walking, biking because it’s so well designed and planned, use electric vehicles since they are also so environmentally conscious, and there is always car sharing, why oh why would there need to be any gas stations? Why would city tolerate having a symbol that represents the barbaric and pollution generating car culture? In its utopian green downtown core no less!

  8. Seriously? Valuable downtown buildable land, and you compared to dirt? And what’s wrong with businesses​ maximize their profit?

    • Absolutely nothing, as long as it doesn’t interfere with bear able to buy that West side SFH for 4x their $100K family income.

    • [FT] – Chinese buyers fuel Brooklyn real estate boom: World property markets have become totally disconnected from national economies

      …”Back in 2007, when I was relocating from London to New York, I bid against a Brazilian and a German for my Brooklyn brownstone. I thought that would be the high-water mark for international buyers interested in fixer-up properties a good 45 minutes from midtown Manhattan, but I was wrong.

      These days, I regularly wake to leaflets from Chinese property developers dumped on my front stoop, offering to buy homes for cash. And this even after Beijing has put various restrictions on the outflow of capital, in an attempt to prop up its currency.

      Foreign money has always played a huge role in luxury property markets like Manhattan and London. While international buyers in New York tend to come and go depending on the strength of the dollar relative to their local currency, veteran appraiser Jonathan Miller, the president and chief executive of Miller Samuel, tells me that foreign buyers over the past few years have come to represent a baseline 15 per cent of the Manhattan luxury market.

      What is new is that they are expanding into border neighbourhoods such as Brooklyn, where town houses typically sell for about a third of what they might in prime NYC, and the foreign money — particularly the Chinese money — is staying, regardless of how strong or weak the dollar is. “Even when the dollar began to rise in 2015, the Chinese didn’t leave — they are just moving to Brooklyn, or Houston, or other second cities, and they are buying cheaper properties with more potential upside,” says Mr Miller.”…

      https://www.ft.com/content/93d89320-2063-11e7-b7d3-163f5a7f229c

  9. @El Ninja – So what’s your alternative? Zone the land for gas station only? Until everyone has switched to electric vehicles? Having a tower right beside a gas station is not that much safer statistically, and probability of gas station exploding is pretty damn low.

    I see this as part of bear’s overall problem. They don’t change with the times. They think everything can only be the way it has to be. They don’t see changes in environment, technology, and other factors causing a potential structural break with the existing paradigm. They think, well my parents bought a west side house for 4x my dad’s salary, and up until 90s, every upper middle class family could buy a west side house for 3x – 4x salary, therefore I should to. NO, it doesn’t! Just like a transition from 1 income household to 2 income household, it’s a structural break. Society is unlikely to move back to 1 income household as the norm anytime soon. Buying a west side single family house for 3x-4x average salary isn’t going to happy anytime soon either. I’m not saying it couldn’t happen, but not in time for me to buy one and pay off the 25 mortgage before I retire at 75. Unless, I triple or quadruple my after tax salary in the next 10 years which isn’t going to be very likely.

    • “probability of gas station exploding is pretty damn low”

      Hear that, authorities / regulators? Now that you know the risk, let’s get that sucker built!

      “Bears don’t change with the times”

      Ah, the tired, “it’s different this time” argument. Very alluring, and very dangerous. It was “different this time” for Dutch tulips. Remember how anything dot.com was going to mint money, and traditional business was dead? It was “different” then, too. It’s been “different” several times now for emerging markets, just as it was “different” for U.S. housing.

      It will be “different” for Vancouver, too… until it isn’t.

      • You and space are talking about two completely different issues. Let me ask you a simple question, do you expect vancouver’s west side detached house, which does not go up in supply to be the same price versus per capita income when the city is 2 million people than say 4 million people? The issue you are stating is that average dwelling prices revert back to norm. Let’s set aside whether that is true or not for a second. In a way, space is saying, the definition of an average dwelling is different today than what it was a long time ago. You two are debating two separate issues completely.

      • “Bears don’t change with the times”

        true, they enjoy wearing grandma’s dresses and driving grandpa’s tank.

    • [CBC] – Bad news for Metro Vancouver home buyers as prices climb: According to realty company Royal LePage, the recent correction in housing market may be coming to an end

      “There is now reason to believe that the market correction underway in Vancouver may be short-lived,” said Royal LePage CEO Phil Soper. “The principal victims of the B.C. government’s foreign buyer tax were Canadians who had planned to sell or buy a home and were frightened away by unsubstantiated rhetoric in which the Chinese were entirely to blame for Vancouver’s housing shortage.

      According to the report the price of a home in Greater Vancouver climbed 12.3 per cent year-over-year to nearly $1.2 million in the first three months of 2017.”…

      http://www.cbc.ca/news/canada/british-columbia/bad-news-for-metro-vancouver-home-buyers-as-prices-climb-1.4073731

      • #Alternatively… #ForLessThanAVancouverSpecial…

        [WSJ/MansionGlobal] – British Castle with Moat Selling For $2.23 Million
        The moated Gothic-style estate was built on the site of a medieval castle that was demolished by Oliver Cromwell during the English Civil War

        …”Starborough Castle, situated on 10 acres on the border of Kent and Surrey in England, is a two-bedroom, two-bathroom home and noted as one of England’s smallest castle. The home is now listed for £1.75 million (US$2.23 million).

        The original Starborough Castle was demolished by Oliver Cromwell during the English Civil War and the current Gothic-style castle on the land was built in the 1970s.

        The listing, which went up in the fall, shows the property includes a 1,066-square-foot main residence, a cottage and a longboat that serves as an additional bedroom or office. The main house features a mini great hall with intricately carved period fireplace, gothic style bay windows, solid oak joinery with paneling and exposed ceiling timbers throughout. The remainder of the estate includes a one-acre paddock, a Sussex-style barn for staff accommodation, a stable and seven-acre field.”…

        http://www.mansionglobal.com/articles/60334-british-castle-with-moat-selling-for-2-23-million

      • rod_jonsson_pmd

        pffft! … if this is the future can i call precrime? … http://tinyurl.com/kv9u7sz

  10. 5 Flights Up – a saccharine movie barely worth bringing home from the library, but with a finger on the skip button it’s worth watching the real estate rodent scenes – an excellent portrayal. The denouement is a little over the top, but fun.

    Glengarry Glen Ross is also worth watching, for those real estate junkies that haven’t as of yet. Interesting to see a young Alec Baldwin – before he became Drumpf’s doppleganger.

  11. Ralph Cramdown

    Seriously, none of you have been to the Eternal City? A gas station doesn’t require a huge parcel of land. Space for a few cars (i.e. a few parallel parking spots) and for a few pumps (i.e. where the sidewalk bench or parking ticket dispenser would go), and you’re done.

    Problem: In much of North America, selling gas has become such a low margin, competitive business that most of the profit now comes from the associated convenience store. But if you’re the only station in town, that problem disappears.

  12. @El Ninja – Contrary to popular believe, modern gasoline do not sit there and waiting to explode at first chance. Shooting regular lead bullets into a car’s gas tank is not going to cause it to explode like in the movies. Not to mention the tanks are buried underground surrounded by concrete. If you worry about explosions, worry more about the delivery truck which is far more exposed to terrorist attacks and accidents.

    • Sorry, you’re not going to convince anyone with half a brain that building a residential tower atop a gas station is a sound idea.

  13. @brian – exactly! The supply of SFH in desirable areas have not kept up in supply with a growing population. It has been shrinking instead. Most bears simply can’t understand the simple concept of increasing demand and decreasing supply, or paradigm shifts.

    “This time is different” is true far more than when it’s wrong. Just like when vaccination became widely available. That time was different because a lot of diseases were either wiped out or brought under control. When’s the last time you heard about a flu epidemic? How about the Internet revolution that changed everything? Was that time not different? Are we going to back to the good old pre-Internet days of DVDs?

    Even if we stop all immigrations and foreigners, jack the mortgage rates back to 6.5%, and maybe even kick out immigrants from the last 10 years, west side SFH isn’t going back to 3x or 4x average family income. Back in 2002, a coworker who’s a manager bought an 50 years old Dunbar house that needs some work for $800K. That price is probably 1/3 to 1/4 of the price today and yet even back then, that’s not 4x an average family income. It might be 4x of a lawyer, doctor, or 2 pigs feeding at the public trough, but it’s certainly isn’t 4x of an average family income.

    • “Most bears simply can’t understand the simple concept of increasing demand and decreasing supply.”

      Most bulls simply can’t understand that supply and demand are there for all to see and hence already reflected in prices.

      “Just like when vaccination became widely available.”

      Lol. I like how you’re comparing the Vancouver RE bubble to one of the greatest medical breakthroughs in human history. That’s a whole new level of stupid–way beyond “Best Place On Earth”.

      • “Most bulls simply can’t understand that supply and demand are there for all to see and hence already reflected in prices.”

        Is that true? What is the supply of detached houses on the west side then since it is all there to see? Please enlighten us. Cause I have been doing research into this sub segment for a while and haven’t seen data on this. Best data is from census data from stats can but that doesn’t even break it down. Not to mention that if you were to ask 100 agents ( I have asked a few, not 100 though) and none of them can tell me. On this board there are quite a few housing “experts” who have looked into this market for the good part of decade, how many knows this number? If the answer is no, then how can we say that “supply and demand are there for all to see”?

        A more interesting question, since this is the basic tenet of your theory. Say if an average investor (not institutional) buys a share of google. How much do you think that average person understands of google’s actual operations? Is it a deep understanding or just a shallow one looking at the P/E ratios or other indicators reported on their reports. If the person doesn’t, should we say that investor understands the stock fully to invest in it?

      • The average investor is irrelevant. There will always be smart money arbitraging away value on the margin, where prices are set.

      • Ah… ok.. so you think the average house buyer is smarter than the average investor then? And that the majority of home buyers are institutional buyers or smart money purchasing property prices? The issue with your theory is that you think the average home buyer truly understands supply and demand. I think I have demonstrated clearly that is not the case. In fact, if you want proof, you can poll most home buyers and professionals working for them and see if that is the case. I ask most agents I interview for myself a simple question, give me the total supply of sfh in vancouver. If you can’t answer it, you shouldn’t be commenting on housing. Just like a guy who doesn’t even know the market cap of google shouldn’t comment on google.

    • “Paradigm shift”

      Got that, innocent mortals? The Gods of Vancouver real estate have rewritten the laws of economics. Learn them, lest ye be priced out forever!!

      • I’m going to throw from my bearish perspective that there has been a paradigm shift that many (myself included) failed to take into account: a change in intended use among investors. Effectively we’ve become London, a resort city of the world’s wealthy (and for economic criminals), but without high-paying jobs.

        In my old-school model, buyers are generally not speculating, and are investing for yield (as rentals), or as their primary residences.

        The reality is that for quite a few years this hasn’t been the case. Particularly with respect to investment from China and the middle east, investors are buying as a store of wealth (gold bricks), or for their occasional (non-resident) occupancy.

        This paradigm shift has resulted in the recent skyrocketing of prices, and I think of it as a one-time adjustment. It can’t possibly propel prices upwards forever, but it does allow for a basic value assessment much higher than simple residential purposes should dictate.

        Whether they’re hiding money from their government, or just want money in a stable country, or if they have eventual plans to retire and live here is almost irrelevant– the fact is that they are buying properties and effectively taking them out of the region’s residential housing stock.

        At the same time, locals are hunting for yield, and taking properties out of the residential housing stock by turning them into hotel units on AirBNB.

        Since housing is being converted from residential use to other purposes (hotel or gold bricks), we don’t have useful statistics on how much housing is available for locals.

        I can’t just fault foreigners: locals are also at fault, buying to rent on AirBNB. Developers do it, too– witness Onni with their rental building-turned-AirBNB-hotel.

        It’s also not just a Vancouver thing. While the massive foreign money influx has been ridiculous here, there’s a massive amount of institutional investment in the US, so they’re going through a paradigm change. In the US, they’re back at their housing bubble peak prices– but their homeownership rates never recovered after their housing crash. My interpretation is that investors have been buying properties there at such a rate that prices recovered to the previous peak. It might be foreign buyers, or it might be corporations buying using cheap debt. It certainly includes pension funds chasing yield.

        The question of where it’s all going to end up is this: there’s been a paradigm shift, resulting in our crazy market. Will this paradigm “stick,” resulting in a permanent high plateau (or continued rising prices), or will the paradigm shift back to the old model, resulting in a collapse?

      • “Will this paradigm stick, resulting in a permanent high plateau, or shift back to the old model, resulting in a collapse?”

        By comparing real estate to gold, you’ve answered your own question. Gold is widely considered a “store of wealth”, yet throughout history its price has repeatedly risen and collapsed.

      • Think of your paradigm this way. If economies are globalized why should residences be local? I think residences are going to be increasingly globalized (well duh…). Myself for example, I want a second residence in a smaller city in Taiwan for no other reason than the fact that my wife has some family there and I have a connection and familiarity with the place. My income is insanely high compared to that city so how do they count me into their model?

        Having second residences in larger cities isn’t a vancouver thing, it is just that recently Vancouver has just joined the club. London like you mentioned is much more prevalent. I bet you if you look at the second residence phenomenon it has become much more spread in the last decade or so. But you also need a source place where this is the case. China and middle east feature rich elites who for one reason or another crave a second residence. Hence you have the demand.

        If you want to know if this paradigm will shift or not, just look at the source of where these people come from. If the reason why they want that second home cease to exist then they will stop having their second home. From a chinese perspective I say fat chance. Until the water and air in china stop killing people (yeah… that’s going to happen) and the government stop hunting down corrupt business people (which is just about every business person in china), they will always look for a way out.

      • Until China is a developed country and until their elites are not the subject of any populist political agenda, they will continue to want a safety net.

        I had thought that ending the immigrant investor program would substantially reduce the foreign investment here, but I was WAY WRONG: the replacement, the 10-year super-visa, is much more compelling to foreigners. It provides the safety net they’re looking for.

        They don’t have to meet any residency requirements, and they can spend half the year here, no questions asked. If there’s a revolution at home, then once they’re safely in Canada, they can apply for refugee status due to the instability at home.

        400,000 of those super-visas had already been issued to Chinese nationals as of a year ago. Enough for at least 100,000 families. Not all will buy property, but plenty will…

      • Please, let’s stop comparing Vancouver to London.

      • You are right… we have much more chinese elite here as a percentage of the market share, London’s got nothing on us in that regard… if only I can find another comparable outside of asia… trying… real….. hard…….

      • @M, you do know who is in power right? the most pro chinese prime minister we have had since his dad. As a chinese person I question what he is doing exactly. It’s like his solution to all of our economic issues is to sell more assets to china.

      • Yes, our government is very pro-Chinese investment; very willing to look at the bright side, and turn a blind eye to any problems.

        From the overall perspective of accounts-in and accounts-out, it makes perfect sense to be bringing foreign money into the country. A rising tide floats all boats, right?

        The problem is that the business investments seem largely to be in established businesses, rather that developing new businesses to grow the job market.

        Or if new jobs are being created, the companies are trying to bring foreign labour in to fill those positions– and thanks to our federal government, I fully expect that they’ll be allowed to bring in their own foreign employees to fill those positions, which will result in Canadians seeing near-zero benefits from those businesses– and we’ll shoulder the burden of environmental risks. Maybe a few tax dollars will be paid to our government. Or perhaps instead, donations will be paid to the political party in power to facilitate this process.

        The positive here is that when a Canadian company is bought out, that’s foreign money filling the Canadian company’s coffers. The downside is that now there’s more money chasing a limited amount of yield. Potentially the economic pie could grow bigger, but its effects may be limited– for example, the local construction industry is a big recipient of the benefits. But the downsides (high costs for young people buying into the market) will affect their ability to spend on the local economy, since more of their disposable income is dedicated to shelter.

  14. Seeking Knowledge

    I don’t have an economics background (other than taking Econ 100 decades ago), but anecdotally I fully to agree with M. That is, foreign money + local hoteliers/landlords-in-training + horde/fear mentality are causing this frenzy. I would like to also add that families nowadays are more willing to move in with each other under one roof to share the costs (i.e., houses where the parents, kid’s families, etc. all live together.), hence a lot more cheap money to drive up the market. Are these all the reasons? Probably not, but that’s what I observe is happening yet logic says that this cannot go up forever and my gut tells me that some black swan event is just waiting to rear its ugly head.

  15. Well, even if I’m wrong and this time is NOT different, it still really is. Why? Because take that average 50 years (well now 65 old, ripe for retirement) old Dunbar house my coworker bought in 2002, it’s probably valued at $3M+ now. It would take a 66% drop would take it down to $1M which is probably what the CPI adjusted price is. You probably have to put in another $100K reno into it, if my coworker didn’t. It is out of reach of the average Dunbar buyer from 30 years ago, back in the golden age of Vancouver.

    So, yes price can crash back down and for the average bear, it would still be different this time, because they just waited for 2 decades for really nothing in the best case scenario.

    You thought housing was expensive a decade ago, house prices falls to that price point again in 10 years isn’t going to be a win for you, especially if you are like average and hasn’t had any actual REAL, AFTER TAX income growth.

  16. Turkey of the week – Van Spec Dreck: 3066 20th Ave E – bought Feb. 2014 for $1.31M – listed at $2.489M. Typical builders who have never cooked a meal, or done a load of laundry. The kitchen layout is atrocious. Unworkable. Stupid. The w/d in a closet is a downer. Typical second illegal suite in the bummer basement. Blech in the dirt.

  17. 3039 23rd Ave E: a scarce new listing that checks some of the hot buttons – all that this real estate rodent has. Priced under assessed at $1.288M for a full-sized lot, it will get a lot of attention from builders, renoflippers, and first-timers. He won’t have to get out his only suit to sell this one. Old folks going off to the care home to croak don’t put up much of a fuss. And the Three Links Care Centre is just a block away. How convenient is that.

  18. 2868 18th Ave E: looks like another getting ready for the care home listing. Don’t they have kids to pass it on to? Quite aesthetic – clearly Chinese-owned. Fairly priced. Better to buy this Mohawk used without a laneway house and two dungeon suites in a new-build that would cost a million more.

  19. #SpotTheDifference…

  20. 2755 27th Ave E: a nothing house without a garage – last assessed at $1.305M – listed at $1.688M. That’s the price of 3,630 sq/ft of dirt in this location. Desirable. Way better than some luxocondo. Nice to see a liveable property aggressively priced to elbow out the builders.

  21. 7269 Nanaimo St: wish I could stick the builder in the shithole illegal suite and make them do a load of laundry while cooking a meal in this joke of a kitchen. $2.799M for this garbage? If you have too much money and no brains – this home’s for you.

  22. 3051 18th Ave E: agent has been fined, suspended, and suspended again. His ad says the garage on this small lot can be “easily modify into a LANEWAY HOME”. Not true.

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