Hot real estate market generates interest in flipping in West Vancouver
The hot real estate market is generating a frenzy of interest in property flipping in affluent West Vancouver as speculators turn big profits in only a few months.
A review of 23 real estate listings by The Vancouver Sun reveals an average turnaround time of about 6½ months between purchase and relisting, with property asking prices inflated an average of 40 per cent, or $1.1 million per property, during that time.
In one extreme case, an undeveloped 18,000-square-foot property at 1424 Sandhurst Pl. in the Chartwell area sold for $3.7 million last May and was relisted in April this year for $6.18 million — a 67-per-cent increase in 11 months.
Some new owners are trying to flip their properties immediately for as much as $500,000, or almost 25-per-cent profit.
These sorts of turnaround listings are the latest manifestation of a controversial market situation that has already made Vancouver one of the world’s least affordable cities. And while offshore buyers have been cited for fuelling the trends, the West Vancouver listings reviewed by The Sun do not show if those flipping the homes live offshore.
“It’s really beyond our control,” West Vancouver Mayor Michael Smith said Friday. “The bottom line is housing is a free market and people have the right to buy and sell houses. I don’t think our citizens would appreciate local municipalities trying to thwart them from selling their houses.”
Kim Taylor, a realtor with Royal LePage, said that increased home flipping is linked to the fact there are more buyers than real estate available, adding that foreign buyers — especially from China and the Middle East — have contributed to the hot market in areas like the British Properties, Ambleside and Dundarave.
“It’s a little out of control,” Taylor said. “The prices even shock the sellers — what they can get.”
Especially desirable are properties located in areas with good feng shui, such as those in the British Properties that are overlooking the water or surrounded by mountains. Others realize their returns might not be as good and they have to lower their asking price. “A seller will list them with huge price tags thinking ‘Oh what a great opportunity,’” Taylor said. “Next to those homes that are priced right they might look like an ugly duckling … .”
Taylor noted so many speculators in the market has had an adverse effect on the neighbourhoods.
“You see the diminishing sense of community there because a lot of people don’t live in the homes and they sit empty,” she said. “It’s more of an investment.”
The Real Estate Board of Greater Vancouver reports that a typical detached home in West Vancouver sold for $2.23 million in April 2015 — up almost 11 per cent in six months and up almost 50 per cent over five years.
The current hot market comes with a warning from the Real Estate Council of B.C. — for both property speculators and for realtors.
Larry Buttress, the council’s deputy executive officer, noted there are no guarantees that property values will continue to escalate. “It’s common knowledge the real estate market has been extremely strong the past several years,” he said. “It can turn. It may have already turned, who knows? But markets change.
Source: VancouverSun >