Why this Vancouver home assessed at $2.8M sold for just $902K

A Vancouver home shockingly sold for under one million dollars, a rare feat for real estate in the city.

If you think it’s because of a poor location, that’s not it. The home is in the Dunbar-Southlands neighbourhood and not too far from the University of British Columbia.

Most recently, it was assessed at $2,813,400, and the initial asking price was, by Vancouver standards, cheap, listed at just $798,000. The nearly 60-year-old five-bedroom, three-bath home has seen better days, and BC Assessment attributes most of its value to the land ($2,723,000).

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Dexter Realty

The secret to why this Vancouver home sold for so cheap is that it’s actually a leasehold property. In essence, the new owner is buying the lease to the land and house, not the land or property themselves. The buyer or lessee essentially becomes the tenant, a tenant with slightly more power than a renter, according to Canadian Real Estate publication Wahi.

“There are a few advantages that leaseholders have over the average tenant. Namely, since they are living in the property for a longer period of time, they can make home improvements as they see fit,” Wahi writes.

“The catch with leasehold agreements is that at the end of the lease, the property reverts back to the original owner, along with any improvements or additions that have been made,” it adds.

A single-family leasehold sale like this is rare, as they usually pertain to multi-family buildings like townhomes and apartments.

Parts of the home’s interior look like a time capsule to the past.

That wallpaper! (Dexter Realty)

The listing suggests that the home offers approximately 5,000 sq ft of space. Some of the bedrooms also offer a staggering amount of built-in storage.

Dexter Realty

A vintage bar with a nearby fireplace will make hosting parties a lot of fun.

Shaken, not stirred. (Dexter Realty)

The new leaseholder also gains access to a pretty massive backyard.

Dexter Realty

“Current Annual Lease is $24,479 Subject to increase in 2035 and 2055,” the listing adds.

Would you have paid this price to buy this leasehold property even if you weren’t necessarily the real owner?