SOME­THING TO BUILD ON?

Condo com­pany pitches unique perk

Vancouver Sun - - CITY - GLENDA LUYMES gluymes@post­media.com twit­ter.com/glen­daluymes

First-time home­buy­ers leaped at the chance to live mort­gage-free for one year in re­sponse to a Lan­g­ley de­vel­oper’s of­fer to make their mort­gage pay­ments.

The savvy mar­ket­ing move by Kerr Prop­er­ties, the de­vel­op­ers be­hind The Land­ing, 78 one- and two-bed­room con­dos in Lan­g­ley, at­tracted sev­eral buy­ers be­fore the pro­mo­tion ended last week, devel­op­ment man­ager Travis Tournier said Fri­day.

“Peo­ple re­ally seemed to like it,” he said, adding “we hope to bring the pro­mo­tion back in the fu­ture.”

Real es­tate an­a­lysts say creative pur­chas­ing in­cen­tives could be­come more pop­u­lar as the Lower Main­land’s hous­ing mar­ket be­gins to cool and prices come down.

Real­tor and an­a­lyst Steve Saret­sky said ci­ties fur­ther from Van­cou­ver seem to be “cool­ing a lit­tle quicker” due to the one-two punch of a sales drop and in­ven­tory spike. Lan­g­ley was the re­gion’s strong­est condo mar­ket just one year ago, with year-over-year price growth peak­ing at 51 per cent in De­cem­ber 2017. But in the months since, in­ven­tory has jumped 387 per cent and sales have de­clined.

Saret­sky said the trend is con­cern­ing, al­though he cau­tioned the glut is ex­ag­ger­ated be­cause 2017 saw in­ven­tory hit record lows.

“Some of last year’s de­mand was built on spec­u­la­tion,” he ex­plained.

The trend seems to be hit­ting Ab­bots­ford and com­mu­ni­ties fur­ther east as well. In Oc­to­ber, home sales plum­meted 50 per cent year-over-year in the Fraser Val­ley, while prices also dropped.

A Canada Mort­gage and Hous­ing As­so­ci­a­tion fore­cast re­leased ear­lier this week said slow­ing pop­u­la­tion and em­ploy­ment growth have cut into hous­ing de­mand in the re­gion.

But the de­vel­op­ers be­hind The Land­ing re­mained op­ti­mistic.

While Tournier agreed that the mar­ket has “ab­so­lutely changed,” he ex­pects it will im­pact pre-sales the most.

Kerr’s project, which is six to eight months from com­ple­tion, is see­ing sig­nif­i­cant in­ter­est from first-time home­buy­ers who har­bour no il­lu­sions about break­ing into the Van­cou­ver hous­ing mar­ket, no mat­ter how much it cools.

Sav­ing for a down pay­ment con­tin­ues to be one of the big­gest bar­ri­ers for peo­ple start­ing out, and the de­vel­oper’s of­fer of one year free mort­gage has proven pop­u­lar, he said. Buy­ers must put 10 per cent down, while the de­vel­oper “matches” that with a cash­back pay­ment of five per cent, which works out to about one year’s mort­gage. At clos­ing, the de­vel­oper gives the buyer the five-per-cent pay­ment al­low­ing them to es­sen­tially live mort­gage-free for one year.

Tournier said the idea was hatched when the de­vel­oper re­al­ized many first-time buy­ers bor­row money from their par­ents for their down pay­ment.

The cash back al­lows them to re­pay the debt quickly, mak­ing it a more ef­fec­tive in­cen­tive than sim­ply re­duc­ing the condo’s price.

Units at The Land­ing range from just above $300,000 to un­der $500,000, with the aver­age price fall­ing around $400,000. A 10-per-cent down pay­ment would be about $40,000, while the fiveper-cent cash back would likely work out to about $20,000.

Ac­cord­ing to an on­line mort­gage cal­cu­la­tor, the monthly mort­gage pay­ment for a $400,000 unit, less the down pay­ment, would be about $1,862 with a 3.84-per-cent, three­year fixed-rate mort­gage.

JA­SON PAYNE/PNG

De­vel­op­ers of The Land­ing con­do­minium project in Lan­g­ley of­fered an at­trac­tive pro­mo­tion for first-time home­buy­ers — the op­por­tu­nity to live for one year mort­gage-free. It’s likely that other de­vel­op­ers will come up with sim­i­lar in­cen­tives as the re­gion’s hous­ing mar­ket soft­ens.

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