BUSINESS
01/07/2020 16:23 EST | Updated 01/08/2020 11:34 EST

Prize-Winning B.C. Mansion With River Running Through It Sees 55% Price Cut

It's on sale for less than the cost of construction, but only the rich are seeing improved affordability on Vancouver Island.

An award-winning mansion on Vancouver Island is on sale for less than half of its asking price just a few years ago, in the latest sign yet that the foreign-buyer frenzy in British Columbia is history.

The 10,700-sq.-ft. house in Metchosin, just south of Victoria, is powered by a hydrothermal system that draws water from the Canyon River. The water flows right through the centre of the building.

Marko Simcic won the Canadian Architect Award in 2003 for the property, which has six bedrooms and six bathrooms. The 68-acre lot also features tennis courts, terraces, a guest house and a boat house sitting on the property’s 1,400 feet of coastline. 

The owner, a prominent Vancouver businessman, recently sold off his businesses and plans to spend more time travelling, according to Logan E. Wilson, the real estate agent representing the property.

Sotheby's International Realty Canada
The house is heated by a river that runs through it.

The house is listed with an asking price of $12.88 million, or less than half of the $28.8 million it was listed for in 2016. It’s also less than the building cost to build back in 2007, which Wilson says was around $22 million.

The previous time the house was on the market, it was at the peak of the foreign-buyer frenzy in British Columbia.

“There was a big Chinese buyer picking up large properties at that time, and if you were to look at the (construction) costs combined with the land value, you could maybe make sense of that number,” Wilson said in a phone interview with HuffPost Canada.

These days, the upper end of the housing market has “definitely slowed,” he said. The Metchosin property has been sitting on the market for some time now, and has already seen the asking price cut by several million dollars.

“It took many months to bring the owner to the reality of pricing on the island,” the agent said.

Click through for photos of the Metchosin house for sale. Story continues below.

Photo gallery Vancouver Island House For Sale See Gallery

This massive price slide is limited to the luxury end of the market. For Victoria’s market as a whole, prices are stable, with detached homes down 0.5 per cent over the past year, to $855,000, while condos rose 3.5 per cent to $520,000.

Vancouver Island was never a major target for the Chinese nationals who triggered a housing frenzy in Greater Vancouver, Wilson said ― the people buying homes here have been typically been retirees from other parts of Canada as well as Americans, who Wilson says make up about 90 per cent of the foreign inquiries he gets about properties these days.

But they’re not buying much, thanks to the province’s foreign buyer tax on real estate, which was recently raised to 20 per cent.

Several of the homes I have listed are American owners who are selling. They really get gouged, unfortunately.Logan E. Wilson, agent

“Several of the homes I have listed are American owners who are selling. They really get gouged, unfortunately, and from my perspective it’s a bit embarrassing, because we can go down there (to the U.S.) and buy anything we want.”

Though he understands politicians’ desire to stop runaway house price growth, Wilson says these policies miss the mark.

“Ultimately it’s a supply and demand issue and they’ve really stopped a lot of development from happening,” he told HuffPost.

“They’re just not allowing enough development for the people who want to be here…. It’s kind of a battle of them trying to keep it a quaint place, which I understand to a degree, versus keeping it affordable for local people.”

But for now, as this property shows, affordability is only improving for the very rich.