The Famous Vancouver Teardown Shack Just Sold For $2.5 Million, $80,000 Over Asking

Tyler Durden's picture

Three weeks ago, when observing the ongoing lunacy in the Vancouver housing market, we mentioned the case of Canadian Bill Ring, head of operations for a property management company who, as Bloomberg quotes, said  "I don’t want to invest in stocks because they’re crazy and real estate is a solid, safe investment."

Much to our chagrin we mocked Bill's zest, adding that "if the housing market in Canada were overheating, you wouldn't be able to get "bargains" like the listing shown below from Vancouver."

 

Little did we know that Bill would have the last laugh less thatn three weeks later.

As CBC News reported this week, "the latest poster child for Vancouver real estate excess is off the market, having fetched — of course — more than the asking price, proving that when it comes to securing a plot of dirt on the city's west side, there seems to be no limit to what buyers will spend."

Well, not buyers: desperate Chinese cash smugglers who will park money into virtually anything offshore if it means avoiding the upcoming collapse of the Chinese financial system, because if anyone knows what is coming in China, it's them.

The (perhaps not so shocking) punchline: the property sold for $2.48 million, $80,000 more than what was considered an outrageous list price just two weeks ago when it was put on the market.

Located on West 14th near Sasamat in the location-location location-driven Point Grey neighbourhood, the house had a sale price that reflects a new upper range for land value. It's certain the wrecking ball will soon land on the shabby little house currently sitting on the property, cheekily dubbed a "dream home" by local newspapers.

Only two blocks away, a brand new four-bedroom, six-bathroom home perched on a slightly smaller lot is currently listed for $4.3 million.

 

Even the local media can barely contain its amusement at the insanity of it all:

 

And yes, it is insanity as we showed a few weeks ago - if one is looking for an indicator of how fast Chinese capital is fleeing the mainland, just look at the lines below: they tell the full story.

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Cognitive Dissonance's picture

It may have 'sold'....but did it 'close'? Until money actually changes hands, nothing has actually been 'sold'.

ghengis86's picture

There's a ton of house flipping shows back on TV. How long did those shows run before being cancelled due to the RE implosion? Should give us a little comparative timeline as to when this upcoming shit storm will come.

y3maxx's picture

I live in Van...that house sold for less than land value btw.

 

building costs are $170 per...do the math.

Citxmech's picture

How does one short RE in Vancouver?

Save_America1st's picture

did Canadia not see what the fuck happened in the U.S. 8 years ago in real estate???  sheesh...get ready for the pain up there, bitchez...

oh well...until it collapses these peeps are gonna think they're super fucking rock stars up there flippin' houses and gambling millions to make a few thousand.  Have fun now while it lasts, but they better know when to get the fuck out and head for the hills.

I'd take that 80 thousand and scoop up a whole lotta phyzz silver with it.

Overfed's picture

If there are any Chinese here in the peanut gallery looking spend way to much on a piece of property in order to park some cash, look me up. Let's make a deal.

Soul Glow's picture

I love bubbles.  The bigger they get the more money is to be made on the other side.  Sit and wait like a spider; spin a tight web made of silver and gold and get ready to catch some flies.

Laowei Gweilo's picture

The bubble hasn't even begun. There is so much cash on the sidelines.

Vancouver is basically on -25% sale already thanks to the cheap Loonie.

If housing prices went down even -10%, it'd basically be a fire sale.

 

Vancouver may slow down or drop a bit but it'll never be cheap again. You'd be better off waiting for London or Manhattan to be affordable lol.

U4 eee aaa's picture

....Unless the corrupt local government gets honest and restricts foreign buying like every other jurisdiction in the world.

Better look out, there is an election coming next year and a lot of people are tired of the empty rhetoric of the pro-rich government in power now

This is a government that just gave $435 million in tax credits to the local film industry ($22,000 per job) so that multi-millionaires like Ryan Reynolds would film his deadpool movie in town while at the same time cancelling $50 bus passes for disabled people

BaBaBouy's picture

TYLER: Obviously they bought the house for the land...
2.45M For Land + 1M for a new luxury build, so for $3.5MIL CAD
they have a custom new LUX house in VAN... Not rocket science...
Remember its all in 40% discounted CAD Fiats!!!

BaBaBouy's picture

TYLER... My contacts tell Chinee are buying up RE across Canada...
Not  just LUX houses.
They are buying small corner stores to large farms/lands...
ALL CASH CAD Fiats.............Fucking 40% Discount to the almighty USD Fiats Paper.
This is whats happening Right NOW...

Laowei Gweilo's picture

They'll never ban foreign ownership because the local municipality and provincial government offices are addicted and reliant on the massive surge in property taxes and construction regulation revenue.

 

And even if they tried to do so, vast majority of Chinese buying property in Canada would have no problem finding at least one Canadian cousin, immigrated child, or 'aunty' to buy for them. 

 

Middle class Canadians leveraged to the shitter and back would take the brunt of any small decline, and Chinese Canadians would just buy up all the 'cheap' foreclosed properties.

Laowei Gweilo's picture

haha people said the same thing on ZH in 2011

wanna compare real estate returns since then? =p

Croesus's picture

Yeah, really. 

I have a nice house in a good neighborhood; I did a lot of upgrades to it, and take good care of it.

Using "Hedonically Adjusted Canadian Shack Prices", I figure my house has gotta be worth in the neighborhood of about $10M:

1. It's in 'Murika...fuck yeah!

2. It's significantly larger than the $2.5M Canadian "Love Shack". 

3. It's in much better condition. 

4. It's got some great upgrades. 

5. All contents of home convey (except for family pieces). 

 

847328_3527's picture

" Me luv u long time. "

 

~ Chineee girl

SILVERGEDDON's picture

Shoulda gone for a solid three million.

That bitch is one of the few remaining heritage homes left in Vancouver.

It should be a national landmark.

It looks like justin Trudeau's reverse cake hole.

gammab0y's picture

This isn't the same phenomenon.

Our bubble was built on easy, domestic debt.   This bubble is built on the stolen proceeds of foreign debt.   It is a total gift to existing RE holders in Vancouver.   Everyone should be selling their homes, going to live somewhere else for 5 years, then returning to scoop up their now abandoned property for a 3 or 4 cents on the dollar and retiring.

The ones who will be hurt (even more than they are currently being hurt) will be the average Chinese citizen.  And maybe even the Chinese elite, if enough pitchforks are raised

jaxville's picture

The Canadian banks cannot weather a drop in real estate prices.  The last time real estate values fell was in 2008-2009 and the drop was a small percentage of appraised valuations.

  That small drop required the Canadian banks to be bailed out by the Canadian government, The Federal Reserve and CMHC (a government entity that insures mortgages).

   When Canadian RE valuations fall 20% or more,  the major Canadian banks will be facing insolvency.  Too high a percent of bank assets are contingent on strong real estate prices.

 

Tall Tom's picture

When the shoe drops pretty much all of the Banks in the World are technically insolvent as the Fiat Currency they've issued is debt.

 

It will be the end of civilization. Billions ofpeople will die as a result as supply chains are dusrupted or shattered. 

 

Afterwards is anybody's guess. Perhaps it will end in a global holocaust of War?

 

But I can guarantee that it will not return to normal in your lifetime.

Save_America1st's picture

geez, you make it sound so fun ;-)

I better order more Mountain House #10 cans of Chili-Mac

mmmmmmmmmmmmmm...chili-mac

I ain't kiddin' neither...that shit's good.  Try the #10 can of Mt. House Creamed Beef.  Excellent stuff for all kinds of recipies.

oddjob's picture

People have been asking that question since 1986.

johnconnor's picture

a very good question, this may be the short of the decade... Vancouver 3X short ETF

FlacoGee's picture

Short these:  $TZS.TO $TZZ.TO

Tall Tom's picture

What about shorting the Canadian Banks?

 

It does not matter anyway.

 

The counterparty will declare insolvency and refuse to pay as they are unable.

neidermeyer's picture

Short tsx:CWB Canadian Western Bank  and tsx:MIC a canadian PMI company

Nickle's picture

One better way would be to short Canadian Retail (Malls) in Riocan (REI.UN) ... a bubble ready to burst

Milton Keynes's picture

short canadian mortgage lenders or REITs

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) y3maxx Feb 19, 2016 7:20 PM

"We're headin' on down to the Love Shack
I got me a Chrysler, it seats about 20
So hurry up and bring your jukebox money"

 

LOVE SHACK ~ B-52's

MissCellany's picture

Tin roof -- rusted!

Actually, the pics made me think of a different tune: "I sat on the roof and kicked off the moss..."

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) MissCellany Feb 19, 2016 8:10 PM

Sir Elton wouldn't be caught dead in a shack like that.

PavlovPup's picture

I always thought it was picked out the bars... composed the song.

Seek_Truth's picture

The new owners should keep that shack just as it is, except that they should hire landscapers to plant as many  tulips in the front yard as possible.

As a sign of what comes next...

History rhymes.

Tall Tom's picture

That was a regional crisis.

 

This one will be Global.

Bunga Bunga's picture

Sure, the meat is all in the land, but when real estate crashes so will land "values" too.

Spitzer's picture

This is Canada. These shows never left the air. They've been on forever. Its the bubble that refuses to pop.I fucking hate it. I cannot take it anymore.

Canadians get patriotic about this retardation. Whoa must be because this is the best place in the world to live. What do you expect prices to do in the best place on earth ?

Its no joke. Look at this. This is the sign you see when  you cross the Alberta BC border.

http://thetyee.ca/Mediacheck/2011/10/03/bc-best-place-on-earth.jpg

 

Its the motto. Seriously.

90's Child's picture

Seems like Canadians have more cash than sense.

The coveted Antelope Island State Park mule deer permit was the last item to sell at Friday night's auction and went for an astounding $410,000, becoming the new world record for the most money paid for a mule deer hunting permit.

https://www.ksl.com/?sid=38493763&nid=1288

British Columbia hunter, Troy Lorenz, made the winning bid Friday night to set the new world record for the highest paid mule deer permit.

oddjob's picture

Lorenz is a guide, some scumbag eurotrash or angry american will pay him twice that for the shot.

knukles's picture

They're a little more polite in Oregon with respect to Californians

https://en.wikipedia.org/wiki/File:Oregon_Ungreeting_Sign.jpg

Kassandra's picture

Oregonian speaking, I can say that's true.
The sad fact is, the housing bubble is blowing hot and fast here too...and many, too many will be caught on the downdraft when it pops.

We aren't at the top of the market yet..but approaching. I'm in the business and no one wants to hear it, no one listens to me. It's unsustainable.

Canadian Renegade's picture

You're not the only one. Every time I hear about this shit I want to throat punch all these stupid mother fuckers. Been waiting for this bubble to burst since 08. (EDIT: Actually 06 but at the time I thought for sure 08 would trigger it.)

I just cannot justify signing my life away for a damn house. Here in Alberta house prices are barely down. Everyone is still delusional thinking the recovery is around the corner and they refuse to sell at a loss. Knowing my luck the BOC will implement NIRP and Cmhc will waive the downpayment all together and I'll have to endure another decade of this bullshit before the bubble finally pops.

pitz's picture

Many Calgary Realtors are refusing to even list properties unless the owner reduces 25% beneath 2013 (peak) prices. 

Canadian Renegade's picture

I'm not hearing anything about this in the main stream though. CREA is saying down 7% or some BS. Not like I trust them but I haven't seen enough from Alt media to be convinced that it is far worse either. Although I am around Edmonton.

Abbie Normal's picture

This is what is happening near Calgary, but it won't ever affect the CREA numbers because they're auctions or private sales not on the MLS.

http://www.greaterfool.ca/2015/11/01/pooched-in-priddis/

847328_3527's picture

When either the Chinese gubmint or the Canadian gubmint halts multi-million dollar transfers out of China into Canada ... only then will this bubble 'pop.'

 

The HK bubble is bursting fast now that both the PRC and HK are checking stuff crossing their borders, besides cartons of milk. It's no longer easy for a corrupt gubmint official to carry a million across and tell their HK lawyer to buy something, anything inn RE.  All that has now changed.

 

When these cash transfer are stopped, Vancouver will 'correct.' Who knows when that will occur given the $$$$$$$$ lining pockets of those involved, both in Canada and China.

pitz's picture

There is minimal foreign participation in Vancouver's RE market.  Its almost entirely Canadian leverage taken on by Canadians driving such. 

Canadian Renegade's picture

I really have a hard time believing that unless their is a staggering amount of mortgage fraud going on.

I work in trades and there are entire neighbourhoods of new houses in Edmonton that are almost all Chinese. Sure a lot of them are Canadian citizens but that doesn't mean all the money is from Canada.

CheapBastard's picture
Canada banks bend rules to move money out of China and into Vancouver real estate

 

Some Canadian banks allow wealthy Asian investors to skirt Chinese law by helping them bring in large amounts of money that is often used to buy real estate in Vancouver, The Globe and Mail has learned. 

Financial institutions in the area have flagged more than 8,200 suspicious transactions since January, 2012, the year China began cracking down on citizens they suspect of corruption.

 

http://www.bnn.ca/News/2015/9/8/Canadian-banks-helping-clients-bend-rule...