Investors dumping Metro Vancouver homes at cost as prices plummet

By Amy Chen

Investors who bought real estate in Metro Vancouver last year at the peak are dumping them at cost to bail from the market in a hurry as prices continues to tumble, recent property listings show.

The dumping is most noticeable in the detached house segment, where prices have been plunging since peaking in May of this year.

The average price for single family homes have plummeted by 12% from $1.83 million[1]http://www.rebgv.org/sites/default/files/REBGV-Stats-Package-May-2017.pdf
to $1.61 million[2]http://www.rebgv.org/sites/default/files/REBGV-Stats-Package-August-2017.pdf
in the three months since May.

In one case, businessman Bai Nan Lai bought the property at 4735 Shepherd Street, Burnaby in June 2016 for $2.1 million, according to BC Assessment[3]https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzVzczUA==.

The property is now on the market for $2.18 million, meaning that the Bai Nan Lai would not be making a profit off the sale[4]http://archive.is/4njpz.

Another businessman, Mingyu Xu bought the property at 4582 Sunland Place, Burnaby in March 2016 for $1.3 million[5]https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV0ZFOA==, and is now selling it for $1.38 million[6]http://archive.is/GPi1B.

Businessman Cesar Augusto Orrelana Murillos is trying to sell the property at 505 Rupert Street, Vancouver, which he bought for $1.05 million in September 2016[7]https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMlA4Wg==, for $1.08 million[8]http://archive.is/vwn7Z.

But it may be too late for these investors who are trying to flee the Metro Vancouver real estate market, as some houses that are being dumped have been on the market for over 100 days, suggesting that many investors who bought last year during the real estate frenzy will be left holding the bag.

“Metro Vancouver’s housing market continues to show strong evidence of problematic conditions due to moderate evidence of price acceleration and strong evidence of overvaluation,” Canada Mortgage and Housing Corporation warned in its 2017 third quarter Housing Market Assessment[9]https://www.cmhc-schl.gc.ca/odpub/esub/68456/68456_2017_Q03.pdf?fr=1504597382201.

“Overvaluation is detected when house prices remain significantly above the levels warranted by fundamental drivers of housing markets such as income, population, and actual and expected financing costs,” according to the CMHC.

References   [ + ]

1. http://www.rebgv.org/sites/default/files/REBGV-Stats-Package-May-2017.pdf
2. http://www.rebgv.org/sites/default/files/REBGV-Stats-Package-August-2017.pdf
3. https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzVzczUA==
4. http://archive.is/4njpz
5. https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV0ZFOA==
6. http://archive.is/GPi1B
7. https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMlA4Wg==
8. http://archive.is/vwn7Z
9. https://www.cmhc-schl.gc.ca/odpub/esub/68456/68456_2017_Q03.pdf?fr=1504597382201

7 Responses to Investors dumping Metro Vancouver homes at cost as prices plummet

  1. Ricky says:

    I sold my house to a sucker way over asking in May. Turns out that his buying realtor lied to him and told him there were multiple offers when his was the only one. Anyway, I just banked a cool $1.6 million for a property barely worth a million.

  2. Raincouver says:

    The really smart ones got out around May, when there was a temporary spike. But if you bought in Many…. it sucks to be you.

  3. Anonymous says:

    I’m sorry, Ms. Chen, this is not news. Just go to East Van or Burnaby. Houses rotting away with a for sale sign up front. The SFH market has all but collapsed.

  4. Ronny Peters says:

    Couldn’t happen to a nicer bunch of thieves and liars.

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