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Jay Currie

One Damn Thing After Another









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5/01/2005

Housing Bubble blog

How silly are Vancouver housing prices? So silly they have their own blog: check out Vancouver Housing Market Blog. Well written with asute analysis.

The 800 SF 2-bedroom condo is standard fare in downtown Vancouver. Most of the new towers that have been erected in Yaletown and Coal Harbour have 2 bedrooms in the 750-820 SF range. In 2003, the best of these were going for around $300K by my recollection.

Today I saw one for $518K, at 1239 West Georgia on the 23rd floor. Here is the listing. Here is the floorplan.

Wow.

Similar things rent for around $1700. Condo fee is $222, property taxes are likely $125 per month. Add on another $50 for insurance and that means you clear $1300 net. This makes the annual yield 1300*12 / 518K = 3.0%. The P/E is 33.2.

This looks like a very nice building with great amenities. Moreover, you've likely got a great view from the 23rd floor. Still, you're living in an 800SF box for $500K plus; one you could rent for a lot less.
Madness!