Buyers line up for days, hoping to grab coveted Vancouver condos
Emily Chan, CTVNews.ca
Published Sunday, July 26, 2015 11:29AM EDT
These days, buyers hoping to land a condo in Vancouver's highly competitive housing market will need more than a down payment to close the deal.
With the price of detached homes out of reach for many in the city, prospective homeowners are literally lining up for the chance to own Vancouver property.
This past week, hundreds of people spent days in line ahead of the Saturday pre-sale for a new condo development on the waterfront in the False Creek area.
Those who couldn't commit to camping out themselves hired somebody to do the waiting for them.
Chris Malkin and his team camped out for a week, representing out-of-town buyers and those who didn't have the time to stand in line.
Malkin, who says he has clients from Victoria, Seattle, and even mainland China, described the condo-buying frenzy as "fun, exciting, but insane."
For those hoping to one day own a Vancouver home, however, the process may not sound so entertaining.
With the average detached Vancouver house now costing more than $1.9 million, condo prices—and competition—are also expected to increase.
Vancouver's mayor, Gregor Robertson, said part of the reason costs are so high is because investors buy property they don't intend to live in, then quickly resell the property to make a profit.
In the past, Robertson has suggested that the province should implement a "speculation tax" to slow the rising prices, but the provincial government is not convinced.
The government argues that restricting foreign investment in real estate could cost the province up to $1 billion in sales and thousands of construction jobs.
Andrey Pavlov, a professor of finance at Simon Fraser University, said that housing and the industries associated with it could account for up to 25 per cent of the provincial economy.
"It's easy to measure the direct construction and development industries, but if you want to put everyone who sort of depends on real estate -- all the interior designers and the home depots and all that kind of stuff -- I would guess it adds up," Pavlov said.
If his estimates are correct, that would make housing B.C.'s largest industry, beating out other areas such as tourism and natural resources.
And the housing bubble is more likely to burst than slowly deflate, Pavlov said.
"It's tricky to get a two or three or four per cent decrease," he said. "The way these things work is they either continue to go up or they crash."
For the potential buyers in line beside False Creek, the hope is that their real estate purchases will secure them both a home and a solid investment.
Eric Tang, one of the condo customers, said he's looking to downsize, but also wants to make a smart financial move.
When asked if he thinks condos are a good investment, he glanced at the line and said, "I hope so. Otherwise, I wouldn't be here."