Are you looking for a stock?
Try one of these
How badly do you want to live in a downtown Vancouver condo? No really, ask yourself. How much are you are you willing to give up for an address in the centre of a city regularly ranked next to Zurich and Vienna?
Is a premium Van City condo worth the money when a larger detached home is just a short drive away could offer the same world-renowned quality of life?
BNN decided to find out what kind of condo an imagined budget of $1.5 million buys in Vancouver’s downtown core, and compare that with a detached home in the same price range.
While our condo at the corner of Howe Street and Drake Street is no doubt a fine example of elegant urban living, our house about 30 minutes away in the Fraserview neighbourhood offers more than two-and-a-half times the space, an separate income property with tenants, and perhaps more investment upside.
What’s a buyer to do?
THE STYLISH CONDO
Living space: 1,200 square feet
Address: 1351 Continental Street, Vancouver V6Z 2N7
This modern and well-appointed unit on the 35th floor of the Maddox tower was built by Cressey Development Group, a builder with a proven track record building upscale Vancouver units.
The kitchen features marble countertops, modern European appliances, and a 48 bottle wine cooler. Both bedrooms have walk-in closets and access bathrooms with double sinks and double showers, and the view of the city is sure to impress the guests at the intimate cocktail get-togethers you’re sure to have there.
While 1,200 square feet is larger than the 1,050 average for condos noted by the Canadian Home Builders’ Association. One wonders if the $1.5 million asking price should command more than 150 square feet about the national average.
Beyond the unit, Maddox residents can enjoy a workout at the fitness centre, stay productive at the business centre, or relax at the rooftop social lounge complete with media centre, kitchen, patio, and outdoor children’s play area.
“For sure, a single detached home in the $1.5 million category is going to be a very strong house on the east side of Vancouver,” said Jeff Fitzpatrick of Sotheby’s International Realty Canada in defense of the price. “On the west side, it’s going to become a little more difficult as the land values have climbed quite significantly.”
THE SPACIOUS HOUSE
Living space: 3,086 square feet
Bedrooms: 4 + 3 in the basement rental unit
Address: 1435 E 62ND AV, Vancouver, V5P2K6
Those willing to forgo downtown opulence for more laid back accommodation in a nearby bedroom enclave like Victoria-Fraserview can cash in big by embracing a half hour drive to the city centre.
The master bedroom in this house has a fireplace, jacuzzi bath, and shower. Forget about underground parking, you’ve got a three car garage. The kitchen has a secondary kitchen called a “wok kitchen” or “spice kitchen,” a feature popular with west coast Asian and Indian buyers who want to prepare spicy traditional cuisine without worrying about smoke and grease damage to the rest of the house.
The basement has been converted into a rental property with a second entrance currently shared by three international students who pay a combined rent of $1,400 per month. Cherry Yang, the property’s realtor from the Sutton Group West Coast, says developers are building new homes with purpose-built rental spaces, and between 70 and 80 percent of houses in Vancouver have some manner of income property.
Owning a plot of land is also a big added value in the detached market. Vancouver is densely developed and properties are commonly worth more than the house that sit on them.
“I helped a client buy a lot on Vancouver’s east side in 2010. There were 14 bidders and we offered a bit over $640,000. The house was older, but still livable. My client renovated a bit and rented out to two families for a few years. He recently sold for $895,000,” said Yang. This house, which has been on the market since November and been seen by about 20 mainly Chinese and Indian buyers, is built on a lot Yang says is larger than average.
The only drawback is the busy street which is close to a bus line. However, that could be a selling point for attracting basement tenants.
Yang says if you’re looking for an investment, both condos and houses have their benefits and drawbacks. A downtown condo pulls in much more money as a rental, but owners are saddled with fees to keep common areas and amenities like fitness centres and pools kept up. While a detached house away from the city centre draws less in terms of rent each month, land is a finite resource and even a small plot can appreciate quickly. If you’re in it to make money, Yang says go for the house.
Forget about Canada, Vancouver is the second most unaffordable real estate market in the world according to the Demographia International Housing Affordability Survey, which tracked the spread between median housing prices and median incomes in over 350 markets. Hong Kong was the only city with a bigger average income to housing price gap than Vancouver’s.
Royal LePage’s annual price survey says the price of a home will jump by 2.8 percent to $835,000 in 2015, nearly double the nation-wide estimate of $419,318. The benchmark price for single detached houses in Greater Vancouver, including bedroom communities like Burnaby and Richmond, exceeded $1,000,000 for the first time in December.
And those big bucks don’t buy much room. CBRE says “prime” real estate in Vancouver costs $1,368 per square foot, surpassing Rome and Milan, and closing on the $2,000 per square foot price take on similar property in Paris.
“It’s definitely the hottest. For the past few months it’s been crazy. The demand is incredibly strong. Vancouver is one of the top cities in the world that people want to live in, so a lot of people are coming here,” said Yang.
“It’s really difficult to identify exactly how many foreign buyers are purchasing. But certainly in the luxury category, and across most product categories, for sure we are seeing a fairly strong influence on the international front,” said Fitzpatrick.