The Highest Bidder
How foreign investors are squeezing out Vancouver’s middle class
BY KERRY GOLD
The woman peers around a partially open front door. Her hair is tangled and streaked with grey. She is wearing a sweatshirt and sweatpants. We’re on Quebec Street, not far from Vancouver’s freshly gentrified Mount Pleasant neighbourhood, with its artisanal bakeries and hipster barbers. At one end of her street, construction is underway on a five-storey condo redevelopment. Four houses have been replaced with a construction pit; another four are slated to come down.
I explain that I’m a journalist. She seems reassured but keeps me on the other side of the door. The woman tells me that her father and mother have owned the two-level bungalow since 1962 and that for more than a year, sometimes as many as two or three times a day, real-estate agents have been pestering them to sell. They’ve even approached her in the alley while she was putting out the garbage. “One agent told me, ‘Don’t wait for your dad to die. You need to get out of here.’”
Offers have been as high as $1.8 million. But if her family does cash out, where would they go? With the benchmark price for a detached house in Metro Vancouver escalating by 27 percent over the last year—hitting $1.3 million in February—and inventory shrinking because of competition from builders eager to redevelop, it would be nearly impossible to buy back into the market. Residents are coping by downsizing to condos, moving to small towns or remote suburbs, or leaving BC altogether. Sales of detached properties in Metro Vancouver reached 1,778 in February—an increase of more than one-third from the same month in 2015.
Once sold, a family house can remain empty for months. It could be empty because it was bought either as an investment or as a residence for someone from abroad with multiple homes, or perhaps because the purchaser (often an absentee buyer) is waiting to flip it for a higher price. It could also be empty because it’s part of a land assembly—a group of houses sold off for redevelopment into condos or townhouses—and awaits the bulldozer. Which is the case here on Quebec Street, where many houses have days’ worth of mail gathering on their stoops. Aside from some parked cars, and this terrified woman at her door, the middle-class enclave shows few signs of life.
The woman speaks in a low monotone. I lean forward to hear her. “I’m so mad at what’s happening in my neighbourhood,” she says. “Look at me—I’m shaking.”
Farther west, some of Vancouver’s most scenic neighbourhoods, with their lush boulevards and ocean views, have been reduced to half-deserted blocks. These are the most prized houses in the city—the area’s benchmark price was $3 million in February—and yet they can stay vacant for years. An effort is often made to keep houses looking lived in, especially if they’re new. Property managers or real-estate agents will visit to turn on taps and pick up flyers. In the days before Halloween, uncarved pumpkins appear on front porches; Christmas wreaths hang from doors until someone thinks to remove them months later. Lights are on timers, curtains drawn. The knock-on effect has been devastating. Without foot traffic, local businesses are failing. And with so many young families clearing out, Vancouver is mulling the closure of twenty-one schools. Frustration has even inspired a popular blog called Beautiful Empty Homes of Vancouver, which documents scores of perfectly livable but empty multi-million-dollar homes.
Jason Manning is a forty-one-year-old radio broadcaster who lives with his girlfriend and her two kids in a rented house in Dunbar, near where he grew up. The reassuring displays of domestic life that he remembers—a neighbour mowing the lawn or waving hello, screen doors slamming, children playing—have all fallen away. Manning moved in just before Halloween and immediately stocked up on candy, but only one child came to the door. In February, the city distributed new recycling bins. Many went untouched for days. “I feel like we’re in that movie The Andromeda Strain ,” he says, “where everybody has died from a mystery virus, and we’re the only survivors.”
This particular disaster sequence, however, is being scripted by frenzied investor speculation that has turned ordinary properties into blue-chip commodities. Examples of “surreal estate” pop up daily. A Kitsilano Point house sold for $1 million above asking. In Dunbar, a small non-descript house on West 22nd Avenue sold for $2.6 million and was flipped eight months later for $1 million more. In Point Grey, a ramshackle eighty-six-year-old bungalow went on the market for $2.4 million. It received three offers and finally sold for $2.5 million. Also in Point Grey, a home that was originally purchased for $4.6 million in 2011 was put back on the market in March—complete with broken windows and a disintegrating frame—for $7.2 million. “I’ve been doing this for almost twenty-five years now,” says agent Don Eilers, “and it’s nothing short of amazing.”
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