# Another Outrageous Vancouver Real Estate Story



## Karen (Jul 24, 2010)

Just when I think things can't possibly get any more ridiculous, I read about this old Vancouver house (built in 1945) that just sold for over a million dollars over the asking price.
Where is this going to end?

http://www.cknw.com/2016/04/06/dunbar-home-sells-for-1-million-over-asking/


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## indexxx (Oct 31, 2011)

At least it's a reasonably decent house with a view in a decent area. But yes it's completely out of control. When is this going to end? If the Big One ever hits and we get wiped flat by a tsunami. Otherwise, there is probably no reason for it to end.


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## Karen (Jul 24, 2010)

Yes, and according to what I just heard on the BCTV news, the buyer is planning to live it rather than tear it down and rebuild on the lot. That's a change from the norm these days. A couple of weeks ago, a house sold in the Point Grey area for over 9 million dollars and the buyer plans to tear it down - and there were ten offers on it, nine of which were cash. How could so many people have nine million cash to buy a house - sounds like money laundering to me.


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## hboy43 (May 10, 2009)

What does Vancouver have that is worth sinking 9 million into?

With that much money, one could have a 45 foot sailboat at some Pacific island with a bevy of beauties as crew. Maybe they would know a reef line from a reefer from a reef, maybe they wouldn't. Then every few months, change islands ... and beauties.

Seriously with that much money one could live anywhere and do anything, so why Vancouver? I don't get it and I guess I never will.


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## Pluto (Sep 12, 2013)

hboy43 said:


> Seriously with that much money one could live anywhere and do anything, so why Vancouver? I don't get it and I guess I never will.


Its probably just an investment for someone - a dozer bait house to be replaced by a McMansion and resold for a profit. 

In the meantime, I hope the madness in TO and Van continues. LOL.


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## Rusty O'Toole (Feb 1, 2012)

It's no secret that hot or dirty money out of China is fueling the Vancouver boom and has been for 20 years. Don't forget that the fall of the Loony has made Canadian real estate 25% cheaper over the last 3 years. So to a foreign investor prices are unchanged even though to us, they are up 25%.

It's like Vancouver and Toronto are the only Canadian cities the Chinese ever heard of. Before you laugh, how many Chinese cities can you name? And how well do you know their RE markets? I'm sure by now every rich Chinese has heard of Vancouver and the endless gold mountain of profits made by early investors.


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## sags (May 15, 2010)

hboy43 said:


> What does Vancouver have that is worth sinking 9 million into?
> 
> With that much money, one could have a 45 foot sailboat at some Pacific island with a bevy of beauties as crew. Maybe they would know a reef line from a reefer from a reef, maybe they wouldn't. Then every few months, change islands ... and beauties.
> 
> Seriously with that much money one could live anywhere and do anything, so why Vancouver? I don't get it and I guess I never will.


Have you watched the Robert Redford movie on Netflix called "All is Lost", about a guy who is sailing in the middle of the Indian Ocean and runs into problem after problem ?

There is no dialogue in the whole movie, and although I know nothing about sailing it was interesting watching him resigned to tackle each problem as they came.

What I got out of the movie, is to abandon any fanciful notions of crossing oceans in a sailboat, unless you really know what you are doing.

After watching the movie, I read up on some websites about such crossings and the preparation and skills needed. No thanks............I will take the ocean liner.

I would love to live full time on a sailboat or cruiser in a marina , but wouldn't need the engines or sails............I wouldn't be going anywhere.

http://www.imdb.com/title/tt2017038/


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## sags (May 15, 2010)

My wife's cousin bought a home in West Vancouver in 1967 in the Eagleridge area. 

She probably paid $30,000 for it. Today it would sell for $6-$8 million...........and all she has done is live in it for 49 years.

Good for her...........but how nuts is that.


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## Karen (Jul 24, 2010)

hboy43 said:


> What does Vancouver have that is worth sinking 9 million into?
> 
> With that much money, one could have a 45 foot sailboat at some Pacific island with a bevy of beauties as crew. Maybe they would know a reef line from a reefer from a reef, maybe they wouldn't. Then every few months, change islands ... and beauties.
> 
> Seriously with that much money one could live anywhere and do anything, *so why Vancouver? I don't get it and I guess I never will*.


Vancouver was listed as No. 2 on Global Finances's list of the the most desirable cities in the world in which to live for 2015, hboy43. Some years it has been No 1.


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## sags (May 15, 2010)

Seattle, Washington has average home prices of $450,000 though.

Why are people buying in Vancouver over Seattle ?

Seattle is on the ocean and has comparable weather. It is a beautiful city with the highest per capita net earnings in the world.

Home prices in Vancouver just don't match the reality of the economics and incomes.


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## fraser (May 15, 2010)

Why is it outrageous?

The seller found a buyer who believed the listing had that much value. 

Something is worth what someone else is willing to pay for it. Sellers in Calgary are just starting to comprehend that.


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## RCB (Jan 11, 2014)

sags said:


> Seattle, Washington has average home prices of $450,000 though.
> 
> Why are people buying in Vancouver over Seattle ?
> 
> ...


If you aren't already an American, or a US resident, getting wrapped up in their tax system can be undesirable.


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## sags (May 15, 2010)

$4 million looks like a bargain compared to these listings in West Vancouver........50 pages of listings from $44 million to the least expensive at $4.5 million.

http://www.macrealty.com/listings/region/greater-vancouver


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## Westerncanada (Nov 11, 2013)

fraser said:


> Why is it outrageous?
> 
> The seller found a buyer who believed the listing had that much value.
> 
> Something is worth what someone else is willing to pay for it. Sellers in Calgary are just starting to comprehend that.


I second this.. the definition of value.


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## Janus (Oct 23, 2013)

fraser said:


> Why is it outrageous?
> 
> The seller found a buyer who believed the listing had that much value.
> 
> Something is worth what someone else is willing to pay for it. Sellers in Calgary are just starting to comprehend that.


Right. And people thought pets.com was worth hundreds of millions. What happened in the end?

If you think humans are always efficient price setters I think you need to read a history book.


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## Karen (Jul 24, 2010)

What I thought was outrageous was not necessarily the price that was paid but the fact that it sold for over a million dollars over the asking price.

And sags, why would a person buy a house in Seattle if they are Canadian citizens who work in the Greater Vancouver area? Even if you wanted to, you can't just pack up and move to the US without U.S. citizenship or a green card, can you?


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## sags (May 15, 2010)

I don't think Canadians are buying these homes and foreign investors have purchased US property for a long time.

A property that has been flipped several times by Chinese investors to other Chinese investors. The current owner has several properties in Vancouver.

The homes are left vacant and are purely speculative purchases.

http://business.financialpost.com/p...deteriorate-now-on-the-market-for-7-2-million

A realtor talked of one Chinese woman who bought 7 properties with 35% down payment on each and mortgaged the rest.

Speculators buy multiple homes for 35% down and sell properties for profit as they rise in value. If a collapse occurs they just walk away from the mortgages and pocket the profits.


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## Karen (Jul 24, 2010)

Good point, sags! I have to agree that most of these buyers are not planning to live and work in Vancouver. On the other hand, if they're looking to make money by flipping houses, surely Vancouver is a better place to do that than Seattle if the average price there is still only $450,000.


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## Getafix (Dec 29, 2014)

Interesting article on the games being played by shady Chinese real estate brokers:
http://www.theglobeandmail.com/news...crying-foul/article29578417/?click=sf_globefb


San Francisco is equally (if not more) crazy:
http://www.businessinsider.com/craz...-survive-san-franciscos-housing-prices-2016-4


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## tygrus (Mar 13, 2012)

Anyone with an ounce of sense can see what is happening in vancouver. Local expats from china who are canadian citizens are helping Chinese nationals offshore business proceeds and then washing it all in canada's tax exempt capital gains law for primary residences.


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## Earl (Apr 5, 2016)

What boggles me is, why do people of normal means (ie the vast majority of people) continue to live in Vancouver? They could easily own their own house in most other cities, but in Vancouver that will never be possible.

I was actually contacted on LinkedIn by a head hunter who wanted to discuss a job opportunity they had for me in Vancouver. Needless to say I didn't even consider it.


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## indexxx (Oct 31, 2011)

It's all about the weather and the natural surroundings, really. They'd rather have warmer weather, a strong local economy, and beach/ocean/mountains at their doorstep. Southwestern BC coast is pretty great, but yes it's ridiculously expensive to buy a house. Stick to the suburbs and you're OK.


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## Earl (Apr 5, 2016)

Seems absurd to throw away your entire financial future for slightly milder winters.


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## Saniokca (Sep 5, 2009)

Earl said:


> What boggles me is, why do people of normal means (ie the vast majority of people) continue to live in Vancouver? They could easily own their own house in most other cities, but in Vancouver that will never be possible.
> 
> I was actually contacted on LinkedIn by a head hunter who wanted to discuss a job opportunity they had for me in Vancouver. Needless to say I didn't even consider it.


Why not? My wife and I lived there for a couple of years (2013-2014) and it was great. All you need to avoid is buying - rents are actually comparable (if not cheaper) than Toronto. The city is much better than Toronto - has all the positives of a big city but has less people. Quality of air is, water, etc. is much higher, you have nature practically at your doorstep.




Earl said:


> Seems absurd to throw away your entire financial future for slightly milder winters.


Agreed with a minor edit: Seems absurd to throw away your entire financial future for the pleasure of calling a pile of bricks "you own".


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## sags (May 15, 2010)

It is strange that Vancouver and Toronto have two of the lowest median family incomes in Canada, but have the highest home prices.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm


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## cheech10 (Dec 31, 2010)

Since the home ownership rate is not 100%, it is no surprise the medians for income and home price don't track that closely (ie. a lot of low income families exist in the major cities and don't own homes, which drags down the income median without affecting the home price median)


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## nobleea (Oct 11, 2013)

cheech10 said:


> Since the home ownership rate is not 100%, it is no surprise the medians for income and home price don't track that closely (ie. a lot of low income families exist in the major cities and don't own homes, which drags down the income median without affecting the home price median)


Does Vancouver have a much lower home ownership rate than other cities in Canada which might explain the high prices? If the home ownership % was half of what it was in other Canadian cities, then one could make the argument that it's only those with high income that own homes.
Of course, that's not the case.
Looks like TO and Van are a couple % below the national average for home ownership.
http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/data/upload/Table-10-ownership_EN_w.xls
Data is a few years old.


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## cheech10 (Dec 31, 2010)

It's not just the ownership rate being different. It's that the population of home owners is not the same as the general population, and that can have dramatic effects on the price of an asset. Also, only a tiny fraction of all homes are sold in a given year, so many people that bought with lower incomes 20 years ago and have not sold yet will also distort the relationship between income and home price. The most meaningful comparison would be median income of home purchasers in the last time period vs median price of homes sold in the corresponding time period.

Similar effects are seen comparing rent and sale prices, ie. expensive luxury homes are typically not rented out, so inflate sale prices without pushing rents up. Need to compare similar groups to get relevant data.

Many of the affordability statistics have similar deficiencies. I'm still bearish on housing in the long term, though, since wage growth and inflation need to keep up with asset prices, but the low turnover nature of housing means that significant departures from the fundamentals can occur and persist for a years.


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## Karen (Jul 24, 2010)

nobleea said:


> ...Looks like TO and Van are a couple % below the national average for home ownership.
> http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/data/upload/Table-10-ownership_EN_w.xls
> Data is a few years old.


I would think that ANY data concerning real estate in Vancouver that is a few years old would be completely meaningless in 2016!


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## nobleea (Oct 11, 2013)

Karen said:


> I would think that ANY data concerning real estate in Vancouver that is a few years old would be completely meaningless in 2016!


Then your suggestion is that ownership rates have increased substantially in the past few years? Entire apartment buildings are empty?

I've no doubt that bubbles (and downturns) last for much longer than people expect. At the current rate of growth, Vancouver will be the most expensive place to buy housing in the entire world. We can all debate whether that's appropriate, but I think we can all agree that's not sustainable.


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## My Own Advisor (Sep 24, 2012)

sags said:


> My wife's cousin bought a home in West Vancouver in 1967 in the Eagleridge area.
> 
> She probably paid $30,000 for it. Today it would sell for $6-$8 million...........and all she has done is live in it for 49 years.
> 
> Good for her...........but how nuts is that.


WOW.


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## Karen (Jul 24, 2010)

Good for her is right !!!


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## indexxx (Oct 31, 2011)

Interesting article here:

http://www.cbc.ca/news/canada/british-columbia/sfu-real-estate-study-foreign-buyers-1.3572499

What strikes me is that the couple in the article are a lawyer and an engineer, and even they can't afford a house!


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## steve41 (Apr 18, 2009)

Schools, shopping centers, highway access were problematic in Eagleridge in 1967. Not so today.


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## dubmac (Jan 9, 2011)

I have lived in Vancouver for the past 21 years - bought a small place in 04, and paid it off.
Trouble is, I do not see how anyone - literally anyone who expects to earn a reasonable income, buy a place and raise a family - would choose to come here. I do not foresee my kids living here...it is not financially viable.
My employer - one that seeks to attract good, young, vibrant and educated professionals (teachers in the private system) is not likely able to attract employees for any real duration of time. They are considering buying property to house their employees in to avoid the impact of high costs on salaries that are not able to keep up with this craziness. 
Vancouver is becoming a community of renters and of "ghost homes and condos"
Pity.


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## OurBigFatWallet (Jan 20, 2014)

Here's an article from CBC on people camping out for two weeks to buy condos in Langley: http://www.cbc.ca/news/canada/british-columbia/langley-condo-camp-out-1.3568946


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## rl1983 (Jun 17, 2015)

OurBigFatWallet said:


> Here's an article from CBC on people camping out for two weeks to buy condos in Langley: http://www.cbc.ca/news/canada/british-columbia/langley-condo-camp-out-1.3568946


That place was a nightmare, traffic and population wise a year ago, I can't imagine it's going to get better with those.


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## OurBigFatWallet (Jan 20, 2014)

In this type of market the only ones who get ahead are those who sell their place (assuming its a principal residence) and move to a cheaper area outside of the Lower Mainland. Vancouver prices have always been historically higher but I've never seen anything like this


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## Pluto (Sep 12, 2013)

OurBigFatWallet said:


> In this type of market the only ones who get ahead are those who sell their place (assuming its a principal residence) and move to a cheaper area outside of the Lower Mainland. Vancouver prices have always been historically higher but I've never seen anything like this


Part of the madness is listings are way down. down about 40% from a couple of years ago, While demand is still high. 

http://www.rebgv.org/monthly-reports?month=April&year=2016

Vancouver seems to be part of the OPEC of real estate. I'm not buying into the theory that foreign buyers are causing this. Seems to be plain old supply and demand.


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## bgc_fan (Apr 5, 2009)

indexxx said:


> Interesting article here:
> 
> http://www.cbc.ca/news/canada/british-columbia/sfu-real-estate-study-foreign-buyers-1.3572499
> 
> What strikes me is that the couple in the article are a lawyer and an engineer, and even they can't afford a house!


I'm curious, has anyone here actually read the SFU report in question? Maybe I'm somewhat skeptical about foreign buyers being the only driving force for the rise in housing prices. I'm not saying that they aren't a factor, but I don't find that they are the only factor.

I find his "study" to be pretty bad actually. He does go through a few factors that have an influence on housing prices, i.e. desirability to live in the city, median income, mortgage rates, housing availability, etc. He compares the Vancouver market with other markets under these factors as a way to see if the prices are out of line. 

Now, one thing I did find interesting is that the inventory of single detached homes in Metro Vancouver has been somewhat stagnant in the past 20 years. However, he pushes that off by saying that condos and apartments more than make it up by providing more housing units, and in fact that is true, the population/housing units decreased during that time. But, if we are talking about housing prices only, a restricted supply with an increasing demand (population growth), that would cause an increase in house prices.

The other thing is the fact that he did use other studies that showed that "mainland Chinese" (based on their non-anglicized names) constituted 70% of sales over $3M, but only 21% between $1-3M. I can buy that the high end properties are being pushed out of affordability, but I suspect these aren't the type of houses a new couple would be purchasing to begin with. His argument is that there is a cascade effect: people who normally would purchase the high end would be forced to purchase lower-end properties raising these prices. Perhaps, but then I would think that those purchases would end up being counted in the >$3M based on what they could afford.

At any case, his conclusion was: can't explain the prices based on any of the normal factors; therefore, it must be due to foreign buyers. To me, this is kind of a weak argument, but I guess if you want to say that and get some press, all the power to you.


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## Woz (Sep 5, 2013)

I didn’t think the report was too bad. There was some interesting information presented, but I agree that not much that was conclusive or even new research.

I took issue with his “distraction” that low interest rate are driving the crisis. He concludes that rates haven’t been a factor because only Vancouver and Toronto have price to income ratios high above Canada’s historical average. He posits that if rates are a factor all cities in Canada should have similarly high price to income ratios. But I think that overlooks the relative price increases that have occurred since rates started being cut. Many cities throughout Canada have seen similar price appreciation. Overall price growth in Vancouver since 2008 is 3rd in Canada behind Toronto and Hamilton, and other than the past year it’s been identical to Winnipeg and Quebec. I don't think anybody is surprised that Toronto/Vancouver is more expensive than the rest of Canada. They're surprised that prices have increased so much in the past ~7 years.

Personally, I think foreign investment is a contributing factor, but that the majority of the price increase can be explained by rates and local demand. In the CMHC Condominium Owners Report they found that 23.5% of people whose principal residence is a condo also own other properties. It doesn’t include single family detached homes, but with regards to the condo market, that’s huge local demand. 

I think a big driver of that has been the expectation of future price increases. It’s fairly common for people not to sell their previous home when purchasing a new one. I’ve seen many people who got a job elsewhere in the lower mainland so wanted to move but instead of selling their old place held on to it and bought another. I’ve seen the same thing when people get married, they rent out their existing condos and buy a new place. Plenty of boomers who would like to downsize but don’t want to sell because they don’t want to reduce their housing exposure. I really think that’s what’s driving the low inventory in Vancouver and price gains over the past year. Nobody wants to sell out of fear of missing out on more gains. With low inventory, large price increases are to be expected.


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## bgc_fan (Apr 5, 2009)

Woz said:


> I think a big driver of that has been the expectation of future price increases. It’s fairly common for people not to sell their previous home when purchasing a new one. I’ve seen many people who got a job elsewhere in the lower mainland so wanted to move but instead of selling their old place held on to it and bought another. I’ve seen the same thing when people get married, they rent out their existing condos and buy a new place. Plenty of boomers who would like to downsize but don’t want to sell because they don’t want to reduce their housing exposure. I really think that’s what’s driving the low inventory in Vancouver and price gains over the past year. Nobody wants to sell out of fear of missing out on more gains. With low inventory, large price increases are to be expected.


I agree with you on this. I suspect the main reason why the prices are going up is because people expect prices to go up. At the start of the boom, I bet you had some houses being bought at extremely high premiums, while overall the prices were fairly affordable. But you had home owners seeing these exceptional purchases and start thinking that their house is worth that much and start holding out for the increased price. Now and then you'll get the foreign buyer who will pay the price, and now we start getting a self-fulfilling prophecy and positive feedback loop that can't seem to be broken.

I think a better report to demonstrate the effect of foreign buyers would be to determine the actual amount of foreign purchases throughout all the price ranges, what was purchased and what percentage are really empty properties.


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## steve41 (Apr 18, 2009)

Another factor is land availability. Mountains to the north, ocean to the west, various rivers and inlets (burrard inlet, fraser river, false creek) and ALR protected farmland to the east and south. In Calgary or Toronto for instance.... a planner just has to decree...."let's build a 20 mile freeway and some housing out in that direction". Not so in the GVRD.


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## rl1983 (Jun 17, 2015)

steve41 said:


> Another factor is land availability. Mountains to the north, ocean to the west, various rivers and inlets (burrard inlet, fraser river, false creek) and ALR protected farmland to the east and south. In Calgary or Toronto for instance.... a planner just has to decree...."let's build a 20 mile freeway and some housing out in that direction". Not so in the GVRD.



This would have happened years ago if that was the case.


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## sags (May 15, 2010)

Where is the prime of the prime location in Vancouver, let's say if one was too buy a 1,000 square foot condo. A small place in the best location ?


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## My Own Advisor (Sep 24, 2012)

Not knowing Vancouver that well, I'm guessing Gastown.


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## steve41 (Apr 18, 2009)

You must mean Yaletown.


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## wert (Jan 26, 2014)

Yeah Yaletown or Coal Harbour.


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## Mukhang pera (Feb 26, 2016)

sags said:


> Where is the prime of the prime location in Vancouver, let's say if one was too buy a 1,000 square foot condo. A small place in the best location ?


I am not sure that in a city the size of Vancouver there is a readily identifiable "best" location. It depends on individual taste, preferences, etc. Yaletown and Coal Harbour have been suggested. I would take the latter over the former, but that's just me. If buying to live in myself, I'd seriously look at Kerrisdale, say around W. 41st and West Boulevard. I would also consider something with a view of English Bay, perhaps west of Denman. I have not been out there for awhile, but I think there are now some nice condos in the UEL.


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## indexxx (Oct 31, 2011)

Mukhang pera said:


> I am not sure that in a city the size of Vancouver there is a readily identifiable "best" location. It depends on individual taste, preferences, etc. Yaletown and Coal Harbour have been suggested. I would take the latter over the former, but that's just me. If buying to live in myself, I'd seriously look at Kerrisdale, say around W. 41st and West Boulevard. I would also consider something with a view of English Bay, perhaps west of Denman. I have not been out there for awhile, but I think there are now some nice condos in the UEL.


It's not really the size of Vancouver IMHO, but the fact that there are so many nice areas- as you say, depending on taste. I personally would not live downtown, so Coal Harbour or Yaletown would be out for me. I like the West End, Kerrisdale, Kits, Point Grey, and the Drive, however I live in Port Moody.


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## rl1983 (Jun 17, 2015)

indexxx said:


> however I live in Port Moody.


Lucky! I've wanted to live there for years.


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## steve41 (Apr 18, 2009)

indexxx said:


> It's not really the size of Vancouver IMHO, but the fact that there are so many nice areas- as you say, depending on taste. I personally would not live downtown, so Coal Harbour or Yaletown would be out for me. I like the West End, Kerrisdale, Kits, Point Grey, and the Drive, however I live in Port Moody.


The West End is downtown, The West Side is perhaps what you mean. As an aside..... a true native Vancouverite pronounces it 'Vang couver", not "Van couver"


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## indexxx (Oct 31, 2011)

rl1983 said:


> Lucky! I've wanted to live there for years.


It's awesome here- super quiet, incredible nature, low crime, and I'm a nice bike ride away from White Pine Beach! And Rocky Point Ice Cream has the best Salted Caramel ever.


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## indexxx (Oct 31, 2011)

steve41 said:


> The West End is downtown, The West Side is perhaps what you mean. As an aside..... a true native Vancouverite pronounces it 'Vang couver", not "Van couver"


My apologies- I do mean the West End but for some reason I never really think of the West End as really 'downtown'- I guess because it's at the edge of Stanley Park and is removed from the office/skyscraper areas. It has more of a neighbourhood residential feel around Denman.


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## steve41 (Apr 18, 2009)

West Side, West End, West Van.... you'd think we could come up with something more definitive.


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