The Vancouver migration from the Westside to the Eastside has been underway for years now, spurred on by an enormous price gap in single family homes across the east/west divide.
An entire generation of aspiring homeowners have focussed on East Van as the promised land and the result has been a robust market that has outperformed the Westside consistently for the past ten years.
We have noticed lately, however, a new reality in the market that most buyers seem to have not picked up on: that giant price gap has diminished significantly!
Consider the following houses sold in Vancouver East over the past few months:
2152 PARKER STREET
1962 E 5TH AVENUE
Or, say, this house currently listed:
1550 E 13TH AVENUE
These are all very nice houses around the 2-million-dollar mark and neighborhoods like Mount Pleasant and Grandview are without a doubt fantastic. No argument here.
But no matter how great East Van is there are some incontrovertible facts that have made the Westside some of the most sought after land in Canada since Captain George Vancouver landed in 1792. Namely the ocean, the beaches, the green space, the views, quiet & idyllic tree lined streets, the great restaurants and cafes…okay, we could go on all day but we think you get the idea.
Now consider this Westside home currently on the market:
There are about a thousand compelling reasons why this house will always be a good buy but we’ll just give you two.
First, you are located 5 blocks from the Pacific Ocean and beaches renowned for their beauty the world over!
Second – and in a strange twist of our current real estate moment – this Kits house is basically in line price-wise with the houses listed and sold in East Van. And, even more shocking, your carrying costs will be less for 2901 W 5th than for most of the houses in East Van!
Let’s take a closer look at the numbers and rental income for 2901 W 5th Ave. ***
For a property of over 1 million dollars, you would be required to put 20% down, so that would bring our mortgage amount to $1,918,400.
Banks are offering attractive variable rates currently, so let’s use a 5-year closed variable for 2.55% on offer. The monthly payments over a 30-year amortization period would therefore be $7616.51.
If you and your family lived in the two bottom floors – over 1700sf! – and rented out the two separate suites upstairs, you could likely expect somewhere in the ballpark of $3000.00 rental income (using $1200 to $1400 for the studio and $1700 to $1900 for the 1 bed).
This would bring your cost to service the mortgage to $4616.51 per month.
Now consider those East Van homes. Some of those listed above do not have a suite (or a “mortgage helper”) and others have 1- or 2-bedroom basement suites that will not generate the same income as the two suites in Kits.
The above house on East 5th, for example, has a 1-bedroom basement suite where you would likely generate about $1400 rental income per month.
So let’s run the numbers for that East Van home.
If we put 20% down, with the same interest rate and amortization, and assume that the basement generates a rental income of $1400, our monthly cost to service the mortgage on East 5th would be $5270.01 with the suite rented.
Or, to put it another way, you would be paying $650.00 more per month for the house in East Van than the 2901 W 5th.
The tides appear to have turned on the east-bound migration that has characterized Vancouver real estate for years.
So, spread the word: there are opportunities and great value on the Westside!
*** Please verify all numbers in this post independently or get in touch with us if you are keen to learn more. The Vancouver Real Estate Podcast does not take responsibility for any of the calculations provided in this post.