The Vancouver Real-Estate Market is Completely Insane

[mbarrick]

OK, the question of renting vs. buying came up in a friend's journal today. Coincidentally a flyer for the Shangri-La (the 60-storey hotel/apartment building going up a block away) arrived today at home. Looking at the floor plans for the apartment starting at $2,050,000.00 I was struck by three things:

1. The boldface lie on the flyer about 360° views when the floor-plans clearly show solid walls on at least two sides of the apartments. Given the shape of the building the best possible panorama from these apartments in the $2-3 million dollar range is about 135°
2. None of the floor plans show any separation between the formal living room, the dining room, the "family" room (I don't expect there will be a lot of families in these two-bedroom apartments) and the kitchen. For over two million dollars I don't want my my fridge, stove and kitchen sink basically sitting in the middle of the living room. They are trying to pass off one big room with the with the kitchen appliances off to one side and and a kitchen island taking up space (and immovable because it contains the sink) floating off-centre in the middle of the room as 4-5 "rooms" (kitchen, breakfast nook, family sitting room, dining room and living room). These are much more like the open studio spaces I've had in the past, only with separate bedrooms of to the side.
3. The size. On the "cheap" end of the scale (i.e. $2,050,000.00) the apartments are just shy of 2400 sq. ft.  The floor plan actually says, "2387 sf 2-Bedroom + Family Room" - and as I mention, the "Family Room" is actually one end of the the kitchen/living-room/sitting-room with no division. A 25-year mortgage on $2,050,000.00 assuming 95% funding with the CMHC first-time homeowner programme and a locked-in interest rate of 6.75% gets you the convenient monthly payments of $13,341.35. Now, here I have two bedrooms, a separate kitchen with a pantry, a dining room with pocket doors to close it off from the living (the dining room is being used as an office), a sitting room, and a full bath, coming in about about 1,900 sq. ft. Believe me, I am paying significantly less than $13,341.25/month. What does waay over $10,000 get extra? The view from an apartment 35 storeys higher than the tallest ladder truck the VFD has, 1½ extra bathrooms (but no claw-foot tub), two walk-in closets, in-suite laundry, and a gas fireplace, totalling about the 500 square foot difference. Even considering allowable rent increases, I'd have to live to be about 100 years old and stay in this apartment for the next 60 years for my rent paid to approach $2,000,000.00. It would take two people with no kids each earning net $100,000/year to afford one of these apartments with enough money left over to maintain the same lifestyle Elaine and I have. The people buying these apartments are idiots.

Renting vs. buying in downtown Vancouver these days? No contest.

Comments

[saturnina.livejournal.com]

To be fair these are being billed as "luxury apartments" and the building will also have a branch of the VAG and an Urban Fare. There has been a trend towards this type of development in Vancouver - like the Wall Centre or Shaw Tower. I totally agree with you on the outrageous pricing. However, the company I work for did custom suites at Shaw, and I know the people who purchased suites there are the same sort who will purchase suites at Shangri-La. They are people looking for a prestige address, not your typical Vancouver buyer.

Anyways, my point is that there are deals to be had, especially in older buildings in the West End. People tend to gravitate towards shiny new Yaletown or Coal Harbour buildings, but there are many older buildings that are not so popular (or that simply aren't being sold by developers, who buy all the suites themselves and release them three at a time so they can rightfully claim a building is 95% sold). There is a lot of hype about real estate in Vancouver, but the market isn't really as smokin' as the media would have us believe.

Personally, we are buying a home now (but only because we are getting a wicked deal on it), but we plan on selling right before 2010.

[mbarrick.livejournal.com]

Good points. I guess my criticism is really rather specific to the shiny new buildings.

And to be fair, as I read deeper in to the pamphlet, some of the other things that come with the Shargri-La apartemts beyond what you mentioned are access to the same services the hotel guests get - the apartemnts come with a 24/7 concierge, maid service, room service, and everything else you would expect of a 5-star hotel. I still don't think it is worth the price, and still woudn't want my kitchen in the middle of the living room, but it does go a little further toward justifying it.

I just hope the roof garden is open to the public. If it isn't I'll pay for a night in the hotel just to get up there to take pictures of the view.

[mbarrick.livejournal.com]

As an aside, I love what Wall Centre brings to the skyline, but I thought the people paying $700,000+ for 300 sq ft boxes in there were idiots, too ;-)