Canada's Housing Bubble

This modest rancher on Petts Road sold for $1.22 million.

Jan 07, 2011 Martin van den Hemel  Richmond Review

The market for single family lots in Richmond has been sizzling hot for the past two months, with one house near Gilbert and Francis roads recently selling for $300,000 above asking price.

Richmond realtor Patsy Hui said there’s a lower-than-usual number of houses currently on the market, and that combined with high demand has driven prices up on buildable lots since November.

Sutton Seafair realtor Peter Schell sold a home at 6531 Dunsany Place that was listed at $798,000 on Nov. 29, for $1,111,111 on Dec. 6 after receiving 49 offers.

A modest 1,100-square-foot rancher at 7480 Petts Rd. in Broadmoor was listed at $1,080,000 and sold for $1.22 million.

Hui said there are currently 339 listings in Richmond, and between 400 and 500 is the norm. When the market was slower, in May and June, there were over 800 listings.

The last time the single family home market was this hot was in 1980/1981, when the price doubled in one year, Hui said.

She’s heard that some buyers are hoping to build their own homes, rather than buying a new one, thereby avoiding the HST, which would cost them $120,000 on a $1 million property, and $240,000 on a $2 million property.

Realtor Austin Kay said he hasn’t seen this level of demand for single family lots in his 16-year career.

“It’s mind-boggling.”

The market is largely being driven, Kay said, by the Asian market, and investors looking to park their money, or to build their house on, or to hire a developer to build a house and then sell it.

“I don’t think it’s been this crazy,” he said, adding that he hasn’t seen a dollar-for-dollar increase this quickly in his career. In the last few months, Kay said prices have increased a couple of hundred thousand dollars.

Buyers are currently looking for lots that are 6,000 square feet or larger, and most listings are likely to draw multiple offers, he said.

“It is a good time to sell, absolutely,” Kay said.

Properties that were purchased six or eight months ago, and are now adorned with brand new homes, are slowly starting to sell, he said.

For sellers trying to avoid the high HST tax on new properties, there’s more of a trend toward having somebody live in a new house for a year—which eliminates the tax implications—before putting it on the market.

There’s more demand for single family lots in central and west Richmond, essentially west of No. 4 Road, but there’s activity all around, Kay said.