Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million

Tyler Durden's picture

Last week we identified a “bargain” in Canadian real estate.

As you might recall, the Canadian economy is in a bit of a tailspin, and that goes double for the country’s dying oil patch. Indeed, we’ve documented Alberta’s painful experience with slumping crude exhaustively, noting that the steep decline in oil prices has triggered job losses (which hit their highest level in 34 years in 2015), depression, suicides, soaring food bank usage, and a marked uptick in property crime.

Through it all, parts of the real estate market in Canada remain red hot. In stark contrast to the millions of square feet of office space sitting vacant in beleaguered Calgary, Toronto and Vancouver are on fire.

Housing sales in the Toronto area rose 8.2% last month from a year earlier. The average selling price: $631,092.

In Vancouver, the numbers are simply astonishing. Residential property sales in Greater Vancouver rose 31.7% in January. That’s 46% above the 10-year sales average for the first month of the year and the second highest January ever, the Greater Vancouver Real Estate Board notes. The benchmark price for a detached home in Vancouver: $1,293,700. The benchmark price for an apartment: $456,600.

But it gets still crazier. The "benchmark" price represents what the Real Estate Board says a "typical" home would go for on the market. If we simply take the arithmetic mean (i.e. the average), the numbers are even more astounding. As CTV news reports, the average selling price of detached homes was much higher last month – at an astronomical $1.82 million.

“Home buyer demand is at near record heights and home seller supply is as low as we’ve seen in many years,” REBGV President Darcy McLeod said.

So a seller's market. Got it. 

In fact, it's such a seller's market that as we showed last week, prices on "fixer uppers" have gone through the roof. Here's what you can get for $2.4 million in Point Grey:

As CTV news also reports, the house shown above is actually in one of Vancouver's most desirable neighborhoods that's home to "A-list neighbours include Lululemon founder Chip Wilson and celebrity environmentalist David Suzuki."

So "location, location" we suppose. 

There are couple of rather obvious questions that come to mind when assessing all of the above. First, what happens if Canada's recession deepens amid a protracted slump in oil prices? You certainly don't want to be in a position wherein you've paid $1.9 million for a home just prior to getting laid off. After all, the debt service burden is already quite high in Canada:

Also, who in the banking sector is most exposed to this lunacy? This quite clearly isn't sustainable, especially given the outlook for the Canadian economy, so who on Bay Street is on the hook? 

Finally, we wonder if there are exogenous factors at play here. That is, is this all domestic demand or could it be that "Mr. Chen" is effectively arbing the inexorable CAD decline versus USD on the way to funneling Chinese money into Canadian real estate thus driving up prices? We close with a simple flow chart.


Incidentally, British Columbia is now studying the level of foreign investment in the real-estate market. "I think with more data, we'll be able to get a grasp on how to address it better because affordability, especially in the city of Vancouver, less so in the suburbs but certainly there as well, is a real issue and we have to find ways to address it," Premier Christy Clark said Monday.

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Soul Glow's picture

lolz people and their houses.  It's like people feel inadaquate with themselves if they don't "own" a home.  And by own I mean take a 30 year loan out from a bank.


That is a tear down to be replaced with the most square feet that can be bribed on to the building permit.

All the China hot elite money is trying to escape the mainland before they get arrested for theft- just like 1997 out of Hong Kong.

OrangeJews's picture

Not to mention the interest they pay on the house AND taxes and repair.  But "I'm better than you because I "own" a house."


People get mad when I say they don't own the house, the bank does.  They REALLY hate that.

BurningFuld's picture

Drove down to my friends place in Richmond this summer (Call it South Vancouver). When I got there I said: Shit I must have been diving faster than I thought. I made it all the way to China.

Durrmockracy's picture

If you want to visit 1970s New York you can still take a walk down the East Side Vancouver....

Bay of Pigs's picture

East Hastings is a Freak Show.

Stuck on Zero's picture

If I could move that house to San Francisco I could double its worth.

I need more asshats's picture

Those god damned Chinamen are buying up Churchill Manitoba too!

cheka's picture

dc is demanding to know who is behind the llc's buying up miami and nyc RE.  of course the other money laundering locales would spike

CapnJackDaniel's picture

Easily substitue Australia for Canada in that graph above

AldousHuxley's picture

Compared to hong Kong this is cheap!


Hong Kong 2 bed 1 bath "luxury"  for $2.4M


comes with orange plastic broom.


How about 3 bed 2 bath 3000sqft for $42M? ($14,000 / sqft !!!) with exposed pipes and in-wall AC.


Handful of Dust's picture

I had no idea plastic brooms were so expensive there?!


I have read that Mainlanders carry suitcases of money across the border to HK and customs in HK are not allowed to question any VIP or gubmint official with a ridiculous question like, 'What's in those three suitcases for a six hour visit?" Local HK'ers are way priced out of the market no matter what their salary is. I can't blame the local HK'ers for getting pretty darn mad and wanting to beat these people up.


I read in one of those English HK news articles the customs guards are more likely to stop some peasant smuggling a case of Similac milk for babies across the border, then to stop some VIP with $1 million cash in a suitcase.

Odd stuff happening worldwide these days.

FIAT CON's picture

No you must have got lost Richmond is mostly East Indian, No?

nufio's picture

that would be surrey.

golden kafir's picture

Ditchmond is unreal these days with high rises going up all over,all built on estuary silt.I'm told these highrises are strictly asian , no white people allowed. Richmond is pretty much 98% oriental 1% east asian and 1% european, it really is like going to another country. There was a mall that opened and they tried to bar europeans from entering with security guards, it seems alot of them have no intentions of assimilating. good luck finding english signs as well. on the plus side red light cams there are a cash cow working non stop. The creepiest time of year is winter when they all go home to china and whole neighborhoods are dark with no lights.

Whootie_who's picture

That house is on a 33 ft wide X 127 ft deep lot....

Durrmockracy's picture

ooh can't wait to see some deep fried Yuppies there!  Loved Vancouver and these pricks really ruined it...

Spitzer's picture

This is a Japan circa 80's bubble. I'm 31. I remember ppl buying fixer uppers in the mid 90's for 250,000. It's been FUCKING mental for so FUCKING long. 


I am going to laugh so hard when this thing blows

edifice's picture

Most people do not understand that personal residences (with some exceptions) are not assets, but liabilities. Inadequacy is an inherently middle-class trait. Gotta have the 30-year mortgaged McMansion, with leased BMW or Merc sitting in the driveway. People in the upper classes call their vehicle "the car", no matter what brand it is.

RaceToTheBottom's picture

To paraphrase the Iron Lady:

"Sooner or later, you run out of Chinese Money" 

The Duke of New York A No.1's picture

Yes .... but with 1.4 billion Chinese in the que; it takes a while to get to the end of the line.



RaceToTheBottom's picture

While the total number is higher than the US or Europe, the ratio is at least as bad as our 99% to 1%.

No farmer from the inner mongolia is going to be buying Vancouver waterfront....

The Duke of New York A No.1's picture

Every time there's a new smog alert in China, aprox 100 more Chinese make the final decision to move to Greater Vancouver.

AldousHuxley's picture

Millionaires in China: 1,300,000  >    Millionaires in Canada: 984,000



The Duke of New York A No.1's picture

Ya ... and about half of those Canadian Millionairies happen to also be Chinese.

Black-Man's picture

Millionaires on paper. And they are taking their paper wealth overseas to buy tangible assets before their loans are called in.

skinwalker's picture

A liability perhaps, but you do have to live somewhere. 


I have a modest house on a few acres. I don't have a mortgage. On my income I could afford a mcmansion, but I don't need that. 

AldousHuxley's picture

Middle class wage slaves have mortgages....aka. layaway

Upper class have showcase properties for compensate for certain insecurities

Elites live in government paid housing...the White House, governor's mansion, etc.



Fullthrottle's picture

And yet people never actually own it. Stop paying your taxes for a year and join the homeless, or is it homefree.

NearCry's picture

Yes, please save me from the $100 per money I pay to "own". (my place is paid off, i just pay taxes). I know people who rent for more in one month than I pay in 1 year.


That's fucking looney eh?

edifice's picture

I wouldn't pay $20,000 for that shack. Make them pay me, to bulldoze the thing.

dumbStruck's picture

I 'd pay 20 grand for it !!! In the unlikely event someone offered to sell it to me for that....

Bangin7GramRocks's picture

But, but, but I thought Canada was dead and the Chinese money is all gone.

JuliaS's picture

They tell Canadians money is flowing back to China. They tell the Chinese, money is flowing off shore. Meanwhile the money is "poof" gone!

RichardP's picture

When Great Britain handed Hong Kong back to the Chinese mainland, many fled with their wealth from Hong Kong to Vancouver.  Perhaps those folks are acting as a magnate for whatever wealth is seeking to find better returns outside of mainland China now.

oddjob's picture

Buy a house over 250K and get a passport I think it was.

Al Tinfoil's picture

Canada is a nice, peaceful place to live.  Rather dull in many ways, but peaceful.  The winters tend to be brutal at times, particularly in central and eastern parts.  The least objectionable weather is in south-western British Columbia, in Vancouver and Victoria - it rarely gets much below freezing there, snow is rather rare, and they get a lot of rain so fresh water is readily available.  Fresh water is so abundant that lawns are watered and toilets are flushed with water fit for drinking - novel idea for many from Asia. The scenery is noted for its beauty.  Nearby mountain areas offer world-class skiing and winter recreation in the winter.

 The governments and society are generally based upon good old staid Great Britain and the  English language (except in the former French colony of Quebec, which rather pugnaciously defends its special status based upon use of a French dialect frozen in time for the last 3 centuries).  The aboriginal peoples have been granted new status under the 1982 Canadian Consitution, and are asserting their historical claims to land and resources through the courts and by occasional blockades, but generally this does not disrupt the daily life of most inhabitants.  The economy is generally unexciting but steady, and the average standard of living is very good, while taxation does not reach the nose-bleed level of the Scandinavian countries.  The police and courts merit their good reputations, and violent crime is rather rare. Hand-gun ownership is sharply regulated, and gun deaths most often occur among drug dealers.  Criminal gangs are generally low-profile and most neighborhoods are safe from all but property crime (which is rare in the better neighborhoods, but rather pervasive in the Skid Road areas infested with drug problems).  Having a huge land area and low population density, Canada has been very welcoming to immigrants over its recent history, and has seen huge influxes of Asians, who tend to be dynamic and hard working assets for the area's society and economy.

Real estate in the Vancouver area has seen mad rushes of buyers from Japan in the 1980s, Hong Kong from the 1980s onward, and from China since about 2000.  Vancouver real estate has been seen as incredibly cheap compared to Tokyo and Hong Kong.  The houses, lots, and apartments are huge compared to those in Tokyo and Hong Kong.  Many families bought homes in the Vancouver area, moved their children in to take advantage of the peaceful and safe living, and good and free education and health care, while the parents remained in Hong Kong or Tokyo to do business in the hot business/low tax zone.  The term "Astronauts" came to mean such parents who spent more time in the air between Hong Kong and Vancouver than they did on land.  Those of European heritage are fast becoming a minority in Vancouver.

The average working person in Vancouver has long since been priced out of the detached home market in Vancouver, and is fast being priced out of the apartment/condominium market.  The suburbs' populations have exploded as families sold out in Vancouver and moved to less pricey areas.  Long commutes became standard practice.  Vancouver real estate has been featured in sales fairs in China for some years now, with emphasis on homes in the pricier areas, typically favor going to homes costing $5 Million or more (big status). Sales of high priced homes have sent a ripple of price increases through to lower-priced urban and suburban areas as owners sold out and moved to less pricey digs.

Real estate prices have been rising quickly for years now, but in the last few months, asking prices have steepened markedly in the urban and suburban areas.  This may be the last hurrah of a bubble prompted by capital flight from China in the face of falling economy and stock market in China, while the kleptocrats try to get their money out of China before they get arrested for fraud.  I have to wonder, as well, how much the craze for real estate purchases reflects loss of faith in fiat currencies and fear of bank bail-ins - real estate has a history of retaining value.


knukles's picture

Just when I was gonna sell all my places in the Hamptons, Beverly Hills and the private island off Pago Pago.  What to do what to do what to do.  Maybe that place in West Des Moines is still avilable.

Son of Loki's picture

Ho Lee Phuk! I have never seen so much Loot flood into a country, no questions asked.

RaceToTheBottom's picture

I have been stopped on the border for over an hour while they searched my car top to bottom for guns.   I must have had a smirk on my face when they asked whether I had a gun and was bringing it into Canada.

Anyway, lots of those houses are insurance policies.  They are left empty for now, just in case....

Berspankme's picture

All the stolen money from China. US and Canada are good at money laundering for the criminals of the world all the while preaching about "human rights". Hypocrites

Handful of Dust's picture

China is tracking many of these Looters down and extraditing them. Recently, Australia, USA and Canada have signed agreements about these issues. However, the real squealing will come when these governments start confiscating these miltimillion dollar houses as their need for $$$ becomes desperate as other tax revenue plunges [ as for example revenue from the energy sector].


It's classic. They simply declare "national security" or some such and freeze the house asset then confiscate it and sell it at auction and feed the government with more easy revenue. And what is the foreigner going to claim? I seriously doubt he'll say anything since much of that money is Loot I suspect.


However, the gubmint can use any excuse to confiscate that house:


Australia orders sales of foreign-owned houses due to breach of ownership rules




"Hey, Wong, you didn't pay your HOA dues...bye bye!" ... and so on....

NihilistZero's picture

+1 I've been saying this for a while. has no loyalty to Chinese expats.  The foreigners helped the banks clear inventory at full 'tard prices.  Now they can be confiscated back and mortgaged to Americans.  Two wins for the banks and one for the government.  That we can get an end to this RE bubble madness is just a lucky bonus for us in the masses...

Handful of Dust's picture

I already told a neighbor of mine who works for the DOJ when they start confiscating and auctioning off these houses PLEEEZE let me know. They could go pretty cheap like back in the 1980's when I got a beautiful $800k one for $285k on 2.5 stunning acres. They confiscated many of these back then from corrupt bankers who were actually indicted and convicted back when the DOJ enforced the law.


Mortgage rates back then were over 14%...crazy stuff.

DaveA's picture

If the government starts confiscating houses on trumped-up charges, houses stop being a store of value, and the bubble pops hard. Here, says the government, buy this confiscated house so we can confiscate it again!

joeblowme's picture

The fact that other targets for capital fleeing China (Australia and New Zealand) are clamping down on foreign investment (whereas Canada is behind the curve) is contributing to the blowoff in Vancouver prices. It's now relatively much easier for hot Chinese capital to escape to Canada than Australia and NZ, so the flows are just taking the path of least resistance. Of course there's also ponzi dynamics at work.

jal's picture

Someone just got $2.4 million in Point Grey.
I wish it could have been me.

Bluntly Put's picture

No bubble there.