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If you own a home in Vancouver, how tempting is it to sell your largest asset and use the cash for something you've always dreamed about?

Cam Hayduk did it. He sold his house in May 2010 on Bowen Island — a 20-minute ferry ride from Vancouver — for about $580,000. "Prices had gone through the roof in the 10 years we have lived here," says Mr. Hayduk, who now rents a home with his wife and child.

He bought the house for $380,000 in 2004, putting a 10% down payment. The return on his approximately $40,000 investment was nearly $180,000. Where do I sign up for a 450% return in six years?

"We wanted to start our business. Originally we wanted to scale down, but there were no options at the prices we wanted, so we sold," says the 45-year-old former camera operator. "We invested the money and some of it went to a video production company we started."

He went from what he describes as "eking into debt" to a situation where he was able to buy new video gear and lights for the business to make it profitable and establish a nice nest egg that is locked away and untouchable.

Elton Ash, executive vice-president of Re/Max of Western Canada, said his realtors can tell dozens of similar stories of clients getting a chance to sell their homes for an amount they originally never imagined.

"We had one realtor dealing with a mainland Chinese client who found a property they liked. The client said they liked the house but they wanted to know if the neighbour would sell their house, too," Mr. Ash says. For the person who didn't have their home on the block, it was a huge windfall. "In this example, the neighbour sold."

How do you say no? Average prices in Vancouver in April soared to $801,252, a 21% increase from a year ago. Profits in some pockets of the city are even larger.

At the same time, affordability in the city has become absurd. According to the Royal Bank of Canada, it takes 72.1% of pre-tax household income to carry a detached bungalow, including mortgage and other household costs.

When you compare it to other Canadian municipalities, the national rate to carry a detached bungalow is 40.5% of pre-tax income, you have to wonder at some point whether it just makes sense to pick up and move.

"This was what my wife was asking this weekend," said Robert Hogue, senior economist with RBC. "What is the likelihood of people packing it in and moving to Calgary? I think employment has a lot to do with it. Are you that mobile?"

Moving is a decision most people have a tough time with even though they know they are sitting on a huge pile of cash in their home, says Clay Gillespie, managing director of Rogers Group Financial.

"I think it's a good time to downsize if you are moving to a less costly home because even if prices do go down, you do lock in equity," Mr. Gillespie says. "Most of my clients are people near retirement, some of whom bought their [million dollar] houses for as little as $50,000."

Moving is a tough call, but if you can make the lifestyle choice, it works. Mr. Gillespie says he had a client who recently sold in Vancouver, bought a similar home in Victoria and pocketed a tidy $800,000 profit.

"The big problem is if you want to stay here, you have to buy something else," Mr. Gillespie says. "The fear is you will be [priced out] if you sell out now."

It's a fear that doesn't register with Mr. Hayduk on Bowen Island. "We don't have any regrets. We are sleeping well and there is so much less pressure. Our house put us into the black in a way we never could have been before."

That's one way to deal with the Vancouver housing market.

Source: Garry Marr, Financial Post

If you have any questions about selling your home, please do not hesitate to contact me.

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