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What goes up must come down
…including Vancouver’s over-priced real estate
Perceptions by Gerry Warner
“I’m forever blowing bubbles. Pretty bubbles in the air . . .” Remember that song? It was a big hit in 1919 a decade before the great stock market crash in 1929. Having just returned from three days in Vancouver, I find that old vaudeville ditty bouncing around in my head as I think of all those new glass towers soaring into the sky over Yale Town, Vancouver’s most frenzied growth centre.
Was I looking at a new Gotham in the making or was I looking at the world’s greatest real estate bubble about to burst? My head is still reeling at the thought. Before the good wife and I even flew to the Left Coast, I heard a news story difficult to believe which said Vancouver had the second most expensive real estate in the world. How could Vancouver be pricier than New York, London or Dubai? Surely not!
But it’s true, according to an international affordability survey released by Demographia, a US think tank, which rated Vancouver’s real estate the second-most expensive in the world, second only to Hong Kong, which has the dubious distinction of being the world’s most unaffordable city. According to the think tank’s survey, the average price of a single detached home in Vancouver is $800,000. Ouch!
You read that correctly. In Vancouver, it takes almost a million to purchase a basic three-bedroom dream house with a carport and a white picket fence. O.M.G! Martha, the world ain’t what it used to be, which makes Cranbrook look pretty good, at least in affordability. Then again, I really should have been prepared for this because before we left a news story was released trumpeting the fact that the most expensive home in B.C. had just been completed on Point Grey Road on Vancouver’s expensive west side. The just completed two-storey, 30,600 sq. ft. house with seven bedrooms and nine bathrooms located on a Kitsilano waterfront lot is valued at $54 million and was built by former Lululemon yoga pants King Chip Wilson, famous for sewing sea weed, or was it yogurt in his eponymous yoga garments?
So I affected a look of nonchalance as the good wife and I strolled through Pacific Centre Mall where she picked up a top at one of the upscale fashion shops priced at $1,200. A piece of cloth for $1,200! What is the world coming to? Then she looked at a dress for $3,200 and we got the hell out of there.
Our next stop was the historic Georgia Hotel where I tipped a few glasses of brew in my younger days and now has a new 60-storey glass tower attached to it. Assuming the addition added new rooms to the hotel, I asked the receptionist how much they cost for a night. Oh, they’re not rooms, she said. They’re suites. Well, what do the suites sell for I naively asked. They start at $1.1 million she replied. I didn’t even bother to ask what they “finished” at.
Next stop was the wharf at the foot of Davie Street on Burrard Inlet where you catch the little tugboat, water taxis that ferry you over to Granville Island Market for lunch. While chugging over in glorious sunshine (yes, sunshine!) I asked the captain at the helm how much the big yacht cost tethered to a dock with a for sale sign. It was owned by a car dealer and was selling for a mere $23 million, he replied.
That was the last question I asked that day.
Now, I don’t want to rain on anyone’s parade but I left Vancouver a couple days later with the distinct feeling that this can’t go on. Down through history, there’s been a sad and expensive litany of bubbles popping and markets crashing. There was London’s South Sea Bubble in the mid 1700s, which burst shortly after a wave of stock market mania spread across Britain. In the early 1600s, there was the incredible tulip bubble, a.k.a. “Tulipomania” in the Netherlands, which saw tulip bulbs selling for thousands before that bubble burst too. And, of course, there was the stock market crash of 1929, which saw penniless speculators leaping from Manhattan’s tallest towers. And then there was the dot com bubble and on it goes.
In short, there has never been a bubble in history that hasn’t burst and who in their right mind thinks Vancouver will be any different? Not me.
– Gerry Warner is a retired journalist and Cranbrook City Councillor. A notorious skinflint, Warner’s opinions are his own.
