If you’re in real estate or mortgages you have to be watching what is happening in #YVR with housing prices sky rocketing out of control. My hats off to the Realtor’s that can handle that high end client because when you are spending millions of dollars you expect a high level of professionalism.
I have the good fortune to follow a few of these Realtor’s via Facebook and twitter and the numbers they are talking about are starting to make me blink several times and read them again. An example this week is of a tear down home in West Vancouver that went into multiples and sold for 450000 over asking price at 3450000 dollars. Client will be tearing it down and building a new home on the 50 foot wide lot. Let’s do some simple math 3,450,000 dollars for a 50 ft frontage equals 69000 dollars a front foot, my home builder buddies will get that math because that is how developers sell land to builders….by the front footage. All of my developer friends just started to drool becauseit’s a number that I’ve never seen in Alberta at least not that I’m aware of at this time. Fort McMurray hit a staggering 10000 a front foot at the height of the boom and now I’m sure it is considerably less. Edmonton and Calgary lots would not be anywhere near that right now and given the expected decline in sales they will probably not be there any time soon. Let’s do some other math, an old rule of thumb was that the lot should be 1/3 of the final house price. Does that mean that the new house should be worth over 10 million dollars?
If I was a developer in Vancouver I’d be planning my retirement party because those prices will carry over to whatever new construction will be this year. The province gave the buyers under a 750000, first time buyers, a break on land transfer taxes. My son in law and my daughter were first time buyers in Kelowna and he got a break on it because of that as a BC resident and a first time buyer already, it may help the move up crowd.
Good fortune for those who are there and getting ready to cash out and retire because the rewards will be huge and better yet tax free.