Vancouver’s real-estate market is so hot that property owners wanting to make a quick buck really don’t have to do anything much.
“That means no new construction, no renovations, no staging the house to make it look better,” realtor Adam Major noted to the Straight.
Major is the managing broker of Holywell Properties, and CEO of the company’s real-estate information site Zealty.ca.
When they make a quick flip, sellers simply include “magic words” in their listings, and presto, the property is suddenly worth more than it actually is.
Say, “land assembly” or “rezoning”.
Major cites 1942 East 49th Avenue as an example.
“The owners of this lime green stucco beauty paid $1.4 million last September,” the realtor related.
The purchase price was $101,000 over its $1,299,000 asking price.
On May 14, 2021, the home with a tenanted basement came back on the market with a listing price of $2,999,000.
Major noted that the new listing price is a 114 percent premium or $1,599,000 more than the sale price from nine months earlier on September 17, 2020.
The $2,999,000 price in 2021 is also 134 percent premium above the property’s $1,281,000 assessed value this year.
“The furniture in both listings is the same so it looks like the poor tenants are having to endure their second listing in a year,” Major noted.
How do you justify such a huge price increase?
“You write the magical words ‘land assembly potential’ in the listing description, crank the Vibrance filter on you iPhone 11 to max, and wait for the buyers to arrive,” Major said.
Specifically, the listing states that 1942 East 49th Avenue has a land assembly potential with 1976, 1962, and 1950 East 49th Avenue.
Just to be clearer, this is how the listing blurb starts: “Attention Builders and Investors!”
To be fair, the 2020 listing also had the words “land assembly”.
However, it was quite vague. It went: “Proposed Land Assembly potential.”
Going back to Major, the Holywell Properties executive has a question.
“Is trying to double your money in a single year enough to win most ambitious Vancouver property flip?” he asked.
Answering his own question, Major said: “Of course not! Why settle for double the money when you can triple your money? In less than a year!”
Which brings Major to his second example: 4996 Rupert Street.
The home was purchased on September 2, 2020 for $1,003,800, which was $104,800 more than its listing price of $899,000.
The 2020 listing “made no mention of the redevelopment potential and the words ‘land assembly’ were conspicuously absent “.
On April 6, 2021, the same property returned to the market, and the listing featured the magic words.
“DEVELOPERS ALERT!” the listing begins, the letters all in capitals to make an emphasis.
“12 HOUSES IN A ROW SELLING AS LAND ASSEMBLY in vibrant Joyce-Collingwood area,” it continues.
Somewhere toward the end, the listing says, “REZONING POTENTIAL, new development opportunity, great for INVESTORS and DEVELOPERS.”
The new asking price of 4996 Rupert Street is $3,399,000.
“If they were to get their current asking price today, the sellers would net a 233 percent return or a profit of $2,335,200 in less than 10 months,” Major said.
“That’s ambition, baby!” he noted.
Also, all the homes listed on the same row having asking prices of more than $3 million.
With land assemblies, owners can demand more for their respective properties.
The reason is straightforward: lots sold together make for a bigger property. A consolidated land means developers get more options to build multi-storey residential projects.
Through rezoning, what used to be single-family-home properties can now be developed as a single site for multi-family housing units.