And subsequent expensive renovations, Re/Max says
Derrick Penner
Sun
Bob and Donna Bryant at their new luxury home built by contractors Blair (left background) and Gordon Wilson. Bryant and Wilson formed a company to redevelop the house across the street. Photograph by : Steve Bosch, Vancouver Sun
It is becoming more and more common for Vancouver custom homebuilder Gord Wilson to be hired by west side clients who have bought a house for $1 million and want $1 million in renovations.
“They usually want to bring the whole house up to current levels or current standards,” the president of G. Wilson Construction said in an interview.
According to realty firm Re/Max’s latest upper-end market trends report, Wilson’s clients are among a growing number of British Columbians willing, and having the wherewithal, to pay for prestigious addresses.
In Vancouver, that means spending upwards of $2 million to secure an address in west side locales such as Point Grey, even if some sprucing up is required to bring it to their standards.
“Most homes undergo some kind of improvement,” the Re/Max report notes.
For Wilson’s clients, that typically means seamless glass showers in the bathrooms, granite countertops in the kitchens, high-tech security systems and radiant heating beneath the floors.
Overall, Vancouver saw 249 homes worth $2 million or more — the luxury threshold set for the market — trade hands between January and July of this year.
Those numbers are small in comparison with the overall market (Greater Vancouver saw 10,817 houses of all types sell between January and August), but represent a 48-per-cent increase from the same period a year ago.
In White Rock and South Surrey, where the luxury threshold was set at $1.2 million, sales hit 105, a 44-per-cent increase from a year ago. There, about one-third of buyers paid top-dollar for desirable lots and opted to have homes custom-built to their specifications.
Victoria experienced 137 $1-million-plus sales, a 13-per-cent rise and Kelowna saw 59 houses worth $1 million or more sell, a 64-per-cent increase.
The extended period of low mortgage rates has played a role in the upper-end market, according to Elton Ash, Re/Max’s executive vice-president for Western Canada.
“If you can get cheap money, you’re going to take advantage of it, and people in this [luxury] market are sophisticated in that regard,” Ash said.
“But that isn’t really the underlying push to the market itself.”
The underlying factors, as Ash sees them, are the strong performance of economies across Western Canada in particular, the equity gains that have accrued during the upturn and growing wealth of the middle-age demographics.
“The baby-boom demographic we’re looking at, that’s where the country’s wealth is focused,” Ash said. “They have the financial wherewithal to enjoy a tremendous lifestyle, and they are very confident in the Canadian and British Columbia economies at this point.”
All the other markets Re/Max looked at in its survey saw growth in the number of luxury-defined buyers, some dramatically so.
Edmonton, where $900,000 was set as the threshold, Re/Max counted 87 transactions between January and July, which represented a 521-per-cent increase. Regina sold 11 homes worth more than $500,000, the luxury mark in that city, which was a 450-per-cent increase.
Saskatoon was a similar story, where the 60 homes worth more than $500,000 that sold represented a 328-per-cent increase.
In Vancouver, Wilson said he deals with some clients buying west-side homes for families. However, other clients are “more established” and renovate homes to suit future uses.
So beyond updating fixtures and finishes, Wilson said buyers are adding accessibility features such as elevators and accommodations for caregivers. He doesn’t see the trend diminishing.
Bob Bryant and his wife Donna are on the leading edge of the trend. They bought an 80-year-old house on Macdonald Street in 2001, and spent a considerable amount to tear it down and hire Wilson to build an architecturally-designed dream house, complete with an infinity swimming pool.
And Bryant, a retired advertising executive, is so confident in the west-side’s allure, he formed a company with Wilson to buy the house across the street to redevelop into a high-end home.
“I can’t suggest that I’m an expert,” Bryant said. “But [the market] is busy all the time.”
While Bryant believes real estate will still experience its ups and downs, he doesn’t believe the market will experience any massive declines in value and “fall apart.”
“There is just too many people in the world gaining affluence and looking for places to live that are comfortable and affordable, at least affordable in other people’s terms.”
