23 Nov A Snapshot of British Columbia’s Real Estate Auctions in 2016
In 2016 the real estate market in British Columbia was hotter than it’s ever been. Despite a new foreign buyers tax announced by the provincial government in July, sales only moderated temporarily as consumers sought clarity. A forecast by Central 1 Credit Union predicts B.C.’s hot real estate market will remain robust for the next two years and that housing sales growth will rotate towards Vancouver Island and the Central Okanagan in 2017, before shifting back to Greater Vancouver by 2018.
What does this mean for the savvy real estate owner looking to maximize profit, and the heady consumer seeking value?
The concept of the real estate auction, while still in its infancy in Canada, is a hybrid arrow in the quiver of a traditional real estate sales and purchasing industry. As domestic consumer education catches up to this new concept, we’ve seen mixed results across three different marketplaces in British Columbia. Here’s a snapshot of Real Estate Auctions in 2016:
In June, Grierson Mansion, a Samuel Maclure-designed home which was built in 1910 and located in Victoria’s upscale Rockland area, was put up for auction – an unusual move for Victoria’s real estate market. The homeowners were from Australia, where auctions are more common, and they wanted to give it a try to see how Victoria buyers would respond.
The mansion boasted over 7,000 square feet of living space, six bedrooms and six bathrooms. The sale was held in the home’s ballroom, complete with champagne and music from a grand piano. Despite attracting more than 2,000 people for tours, in the end only one bidder came forward and it was announced that the sale would be negotiated in private.
This Burnaby tear-down, located in Upper Deer Lake on a corner lot, was listed at $1.699 million. The house was listed as “little or no value,” and “unlivable,” by the listing agent. The appeal of this 50-ft.-by-149-ft. lot was its location in a quiet neighbourhood, near schools, transit, and shopping. The auction was the first-ever sales of its kind in Metro Vancouver. Bidders were able to participate online and none of the bidders showed up for the event in person.
The Globe & Mail reported “It wasn’t a silent auction, but it sure felt like one”. In the end, the tear-down home failed to sell at auction when bidders did not meet the reserve price. Numerous realtors and local developers attended the event curious about how it would unfold. Despite the lack of sale, the auction generated significant attention for the property.
Harvest Ridge Luxury Orchard Estate, which had previously been on the market for 10 months, included a five-bedroom and five-bathroom contemporary home with a 54’ outdoor pool, tennis court, four-car garage and a sprawling orchard made up of 8,200 mature cherry, apple, and pear trees. The Garage Sale ran a progressive and compressed marketing campaign, in conjunction with six weeks of due diligence, which culminated with ten registered bidders, and resulted in one hundred and fifty guests attending a live, unreserved real estate auction event which ended in a record-breaking sale. The property was sold for a record hammer price of $5,775,000 and final price before tax was $6,315,000, setting a new record for highest price paid for an off-lake property listed in the Okanagan.
The Garage Sale also featured a community-impact initiative – a charity auction raising nearly $60,000 for The BC and Yukon Chapter of The Children’s Wish Foundation of Canada. Guests were invited to bid on exclusive items and experiential packages from elite partners to benefit the charity, which helps Canadian children, families and communities by granting the heartfelt wish of a child diagnosed with a life-threatening illness.
While real estate sales by live auction have been slow to catch on in Canada, they are very much the norm in other parts of the world such as Australia and The United States. The Garage Sale’s proven track record speaks volumes about why this is a desirable way to buy and sell real estate and we see potential for sizable growth in the industry in Canada.