De­mand strong for con­dos, town­homes

De­mand for new res­i­den­tial of­fer­ings ex­pected to stay ro­bust in the months ahead

Vancouver Sun - - FRONT PAGE - MICHAEL BERNARD

Com­pared to last fall, when dozens of res­i­den­tial tow­ers were launched in Metro Van­cou­ver’s new-home mar­ket, real es­tate ob­servers ex­pect this fall to be a pe­riod of lower in­ven­tory, with smaller de­vel­op­ments play­ing a prom­i­nent role in the mar­ket­place.

These ob­servers say de­mand still re­mains in­cred­i­bly strong, ex­plain­ing why prices have con­tin­ued to rise for con­do­mini­ums and town­houses this year. They do not an­tic­i­pate that in­ter­est rate in­creases — there have been two this year — will have a sig­nif­i­cant im­pact on that de­mand in the short term.

MLA Canada, an amal­gam of Mac Mar­ket­ing Sys­tems and BVLD Mar­ket­ing Group, pre­dicts that the five most ac­tive pre-sale mar­kets will be Co­quit­lam, North Van­cou­ver, Rich­mond, Van­cou­ver and Burn­aby.

“Any town­home prod­uct is go­ing to be ex­tremely valu­able,” says MLA prin­ci­pal Cameron McNeill. “The sin­gle-fam­ily home mar­ket is beyond the reach of most now. Town­home prod­uct is in short sup­ply. We will see town­homes from Squamish to Chilli­wack be­ing in in­cred­i­ble de­mand and in short sup­ply.

“In the multi-fam­ily mar­ket, we are go­ing to see more units con­gre­gat­ing around tran­sit,” he said.

Scott Brown, pres­i­dent of Fifth Av­enue Real Es­tate Mar­ket­ing, one of the re­gion’s largest multi-fam­ily mar­ket­ing firms, says he fore­sees a more sus­tain­able mar­ket.

“I think the mar­ket is as good and maybe even more sta­ble this year,” he said. While last year’s for­eign buy­ers’ tax tem­po­rar­ily slowed down sales, this past sum­mer has been very strong.

Brown noted that one project in North Van­cou­ver’s de­vel­op­ing Sey­lynn dis­trict, the 50-unit Crown and Moun­tain homes near the Phibbs bus ex­change, sold out in a cou­ple of days, even be­fore his firm had a chance to open the pre­sen­ta­tion cen­tre to the public this fall.

He ex­pects this sea­son will be char­ac­ter­ized by this kind of smaller project. That is a de­par­ture from last year’s big de­vel­op­ment re­leases, such as 23-tower City of Lougheed in Burn­aby, Con­cord Pa­cific’s 10 tow­ers a few min­utes west at Brent­wood, and Sta­tion Square’s fourth tower at Metro­town.

Else­where in North Van­cou­ver, for in­stance, 164-unit Green on Queens­bury has just been launched by Qualex Land­mark North­ern Lim­ited Part­ner­ship as North Van­cou­ver opens up its Moodyville neigh­bour­hood, formerly a col­lec­tion of post­war sin­gle-fam­ily homes, to denser de­vel­op­ment.

Such de­vel­op­ment will also fea­ture new in­no­va­tions such as pas­sive heat­ing and the “lock-off suite,” which the city of North Van­cou­ver be­gan pro­mot­ing a cou­ple of years ago by of­fer­ing de­vel­op­ers den­sity bonuses, says Greg Lowe, of rareEarth Project Mar­ket­ing. His firm’s client, Evolv, is build­ing a 36-unit town­house de­vel­op­ment on Moody Av­enue that will fea­ture lock-off suites for three- and four-bed­room homes. The 300- or 500-square-foot self-con­tained suites, com­plete with kitch­enettes, can be legally rented out monthly or used by fam­ily mem­bers, de­pend­ing on the buyer’s needs, he said. The sales cen­tre on lower Lons­dale, now open by ap­point­ment, is sched­uled to open to the public later this month.

Mean­while, in neigh­bour­ing Burn­aby, large de­vel­op­ments such as Led­ing­ham McAl­lis­ter’s mul­ti­tower South­gate City are not ex­pected to be launched un­til 2018, but other de­vel­op­ers have al­ready jumped into the fall mar­ket. Town­line’s Sus­sex is a 321-unit, 41-storey tower to be lo­cated a short walk to Metro­town’s SkyTrain sta­tion and the Me­trop­o­lis mall. It launched in Au­gust and sales have been brisk, with lim­ited in­ven­tory of one-, two- and three-bed­room homes still avail­able.

Else­where in Burn­aby, de­vel­op­ment con­tin­ues on Burn­aby Moun­tain at SFU with In­ter­gulf’s Ter­races at The Peak, a 117-unit com­plex that of­fers both res­i­den­tial and in­vest­ment op­por­tu­ni­ties in the cam­pus neigh­bour­hood.

Michael Fer­reira, a part­ner in Ur­ban An­a­lyt­ics, says lower in­ven­tory is a dom­i­nant theme in this year’s hous­ing mar­ket. “The num­ber of sales in the first half of this year were lower than they were last year, but that wasn’t nec­es­sar­ily a re­flec­tion of any drop in de­mand; more so, it was just a lack of sup­ply.” About 87 per cent of all 6,050 units re­leased in the first half of the year have sold, a high ra­tio of sales to re­leases. That re­lease is 44 per cent less than new units re­leased in the first six months of 2016, a drop he at­trib­uted to de­lays in mu­nic­i­pal ap­proval times.

Fer­reira notes that Burn­aby is a mar­ket where de­mand is ex­tremely high, which leads to “pent-up de­mand” con­tin­u­ing to build as new buy­ers come into the mar­ket­place. With such con­di­tions, per-square­foot sales prices have risen from $970 a square foot for projects launched in 2016 to new highs of $1,100 a square foot this fall, he said.

In Rich­mond, Landa Global De­vel­op­ments is poised to launch sales of Cas­cade City, 273 units in two mixed-use tow­ers shar­ing a podium and lo­cated near the many ameni­ties of Rich­mond Oval and walk­ing and bik­ing paths on the banks of the Fraser River.

Within Van­cou­ver proper, Cre­ate Prop­er­ties is set to be­gin sales of its 233 homes at its Sec­ond + Main de­vel­op­ment, while Grosvenor Pa­cific has be­gun mar­ket­ing The Pa­cific, a 39-storey tower with 214 units at Pa­cific and Hornby. Mean­while, Chard De­vel­op­ments will be­gin sell­ing 58 units in a seven-storey de­vel­op­ment south of the Olympic Vil­lage called Elenore on Fifth.

McNeill notes some of the best val­ues may be found in the lessob­vi­ous places, such as Squamish.

Nei­ther McNeill nor Brown see the re­cent in­ter­est rate in­creases hav­ing an ap­pre­cia­ble im­pact on this fall’s sales. How­ever, both do see the stress test­ing im­posed on lenders by fed­eral au­thor­i­ties — whereby bor­row­ers must be able to show they can shoul­der higher pay­ments should rates in­crease — could have an ef­fect in the new year.

Mean­time, Jason Tur­cotte of Cressey De­vel­op­ments has a word of warn­ing for buy­ers this sea­son: make sure the de­vel­oper you pur­chase from has a track record for see­ing their projects com­pleted.

“It’s no dif­fer­ent from buy­ing a car. You wouldn’t buy a car from a car com­pany you’ve never heard of. Know you are buy­ing from some­one who has the means to see these projects through.”

GETTY IMAGES

Sus­sex, pic­tured above, is a project from Town­line in Burn­aby. The project launched last month and sales were im­me­di­ately brisk.

An artist’s ren­der­ing of Ter­races at the Peak, right, a project that will rise at SFU’s UniverCity com­mu­nity atop Burn­aby Moun­tain.

An artist’s ren­der­ing of Green on Queens­bury, left, a project from Qualex Land­mark North­ern Lim­ited Part­ner­ship in North Van­cou­ver.

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