Sunday, March 27, 2011

The fickle winds of change.

Along with the west side of the City of Vancouver, the City of Richmond has experienced a surge in house prices as well. And like Vancouver, hot asian money is said to be the reason.

According CBC, home prices in Richmond are skyrocketing.

The Real Estate Board of Greater Vancouver reports that, over the past year, the price for detached homes in the Vancouver suburb has climbed 20% (about $215,000). The median price for a detached home in the Garden City is now hovering just above the $1-million mark, up from $885,000 just six months ago and $879,000 one year ago.

Giddy up.

And according to Patsy Hui, a Richmond real estate agent, it's not the inherent beauty of Richmond that's driving prices: It's the investors. "All kinds of people, but mostly people originated from mainland China," Hui said. The prices may seem high to us, she added, but present a "real deal from a world point of view." One home that sold last year for $1.2 million brought $1.73 million this year, Hui said.

Buy now or be priced out forever, right?

Well... not so fast. In what may become a colossal paradigm shift (although you know damn well the shepple have short memories), Richmond may be about to see an abrupt reversal to that trend.

Remember that little 'shake and slosh' that hit the land of the rising sun two weeks ago?

Seems the images of that stunning 9.0 earthquake and resulting Tsumanmi have struck a chord. As the images of waves sweeping across the flat Japanese countryside, wiping out houses, buildings and airports with relative ease, a realization appears to be taking hold.

And that realization is that the images seen in Japan are not all that far removed from images that we would see in Richmond when the Cascadia subduction zone triggers it's own, long anticipated, 9.0 earthquake and Tsunami down the inside passage and onto our shores.
People aren't stupid. After watching the devestating images from Japan, nervous eyes are glancing at Richmond, which sits below sea level with only a rinky dink little two foot dyke as protection. The predicted 30 metre Tsunami triggered by a 9.0 earthquake would wipe Richmond houses off the face of the earth. As the City of Richmond website notes,
  • "Richmond is located on a floodplain. A ‘floodplain’ is: 'land adjacent to a watercourse that is susceptible to flooding', such as from periods of high tide. In addition, isolated instances of flooding can occur in any community as a result of unanticipated weather events. To protect Richmond from the possibility of flooding due to high tides or river floods, the City has constructed a comprehensive system of dykes on Lulu Island. These dykes are over 49 km in length and protect an area of 12,805 ha."
As always our local anecdote archive, VREAA, captures the emerging reprecussions of world events on our little hamlet on the Edge of the Rainforest. Only two months ago, a local realtor was boasting that:
  • “One of the owners of a large west side Real Estate company has a friend in Hong Kong who’s been living there 20 yrs. He says that Vancouver's ‘official travel destination’ status from the Chinese government, combined with a restriction on investing in China real estate, has opened the flood gates to dumping money into Vancouver real estate. He says ‘it’s only the beginning’.”
And since all beginings have an end, it appears the... ummm.... tide has turned. The same realtor notes a stunning reversal of fortune barely two months later, and only about 14 days after the Japan earthquake.
  • “Funny enough, my buddy is a firefighter and lives in Richmond. He said the same thing. Many ‘For Sale’ signs and no buyers, unlike a month ago. If true, this should be a lesson to all of Vancouver East and West about how fickle the market can be, even with the ‘Asian invasion’ as it is often described.”
Oh my. If the trend plays out, it is a stark example of just how fast things can change.
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