As the ongoing debate rages on among politicians and policy makers about how to deal with rising real estate prices, houses continue to be sold and flipped as people trade “Vancouver real estate like it’s a cheap penny stock.”
Those are the words of Vancouver realtor Steve Saretsky, who also runs Vancity Condo Guide where he blogs about different topics on real estate.
In his most recent post, “Vancouver Real Estate Speculation Runs Rampant”, Saretsky shares some numbers that are only accessible to realtors. He tells us that he wanted to test his own theory that real estate speculation is running rampant.
He did a search of all houses sold in Vancouver West for the month of May and found that of the 179 detached houses sold, 28 had already been sold once in the last year, with the average profit on each house sale about $1.14 million.
Saretszky even shares an example of a home in South Granville, bought and sold four times since January 2014 at an overall increase of $2,512,000,.
Locals getting in on the game
And it’s not necessarily foreign buyers who are flipping houses like pancakes.
Saretsky says he’s witnessed first-hand that locals are getting in on the speculation game.
“I’ve met plumbers that are nine to five plumbers that are looking for investments that basically they can turn around and flip. So I think it’s a lot of locals too.”
He says though it’s a bit of a gamble because no one knows what’s going to happen with prices, anyone with money and nerve who is buying with the intention to flip in a few months has a good chance of making a profit.
“At this point you’re almost guaranteed to make money, so I think you’re basically just taking that risk.”
He says it’s only part of the problem with the Vancouver real estate market.
“I think that there are a few pillars that are causing the prices to soar like they are. I think it’s the speculation that we’ve been talking about, and not just foreign speculation, but local speculation… a lot of foreign investment, and ultimately I think it comes down to a lack of government regulations.”
He says that also there’s a bit of FOMO happening, or Fear of Missing Out. Everyone who has money is trying to jump into the market while they still can.
Unfortunately for many Vancouverites, missing out is already a reality.