Thursday, January 20, 2011

British Columbia Waterfront Properties Take a Serious Hit

Bubbles burst on the margin first. The same people who don't believe 20% price drops in one year are possible for Vancouver, probably thought the same about this sub-market.

Some high-end rural waterfront properties see substantial price drops
She said one of the most dramatic price markdowns was a restored character house on an acre of Denman Island westfacing waterfront, first listed in 2007 for nearly $1.5 million, which recently sold for $665,000. “It was amazing. It was a beautiful renovation.”

As well, a Courtenay waterfront property originally on the market for $1.2 million, is now listed for $789,000.

Kneeland, who currently has about 500 listings on her website, said it’s a good time to make a great deal.
Does the universe cease to exist if a realtor goes a day without mentioning that it is a great time to buy?

Neilsen said that owners who are forced to sell are seeing steep price reductions, but many are simply refusing to drop their prices until the market changes.
The market is certainly going to change.

The economic news out of China is scant and questionable, but in contrast to this paltry little blog's tagline, I'm starting to think Australia and Canada are going to go down first. But they are both small, so it's hard to imagine them as trigger events for impacting the bubble back in China.

Hm, let's make a crazy estimate: if all 10000 eligible monied immigrants to Canada bought $3 million in real estate (two West Van houses). Add that up over 5 years, that would be a $150 billion. Say the price drops 20% this year. That's a loss of $30 billion. If they truly paid cash, they may just shrug it off. If the purchases were leveraged (as I have a personal suspicion most of them are) then this might be cause to sell off either in Canada, or back in the home country. But it's still a drop in the bucket compared to China's real estate sector. The public profiling of people suffering losses may have more of an impact, by shifting sentiment.

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