Priorities change for buyers, builders
Vancouver chiropractor Beverley Steinhoff is looking to swap views for gardens.
She is listing her 1,700-sq.-ft. condo at the top of south Granville — which looks out on the city, mountains and ocean, and is close to several parks — so she can move into a townhome in Shaughnessy that has a beautiful garden.
“We’ve always had a lot of access to green space where we live, but we wanted more privacy,” she said.
As open houses and presentation centres reopen with COVID-19 safety measures, developers wonder how the pandemic lockdown might affect the features that homebuyers look for and how the economic fallout will hit the real estate market.
Benchmark housing prices released by the real estate industry held firm, and even nudged slightly higher, in May compared to a year earlier. But at least one major bank has joined Canada Mortgage Housing Corporation in predicting there will be price drops to come.
In late May, CMHC chief executive Evan Siddall predicted B.C. home prices could drop 10 to 19 per cent due to job insecurity, income losses and high levels of debt. This week, the federal housing agency stepped back from that steep number and said, instead, that home prices across the country could decline as much as 12 per cent over the next 18 months before recovering in 2022.
In mid-June, RBC economist Robert Hogue warned benchmark home prices across Canada would drop seven per cent through the middle of next year. RBC had earlier been predicting a more moderate 4.7-per-cent drop.
This week, the CMHC’s deputy chief economist Aled ab Iorwerth also warned that any predictions it makes over the next few months are subject to significant swings because of coronavirus-related uncertainty.
Realtor Steve Saretsky said detached homes in East Vancouver and North Vancouver are hot right now, especially for those with some home equity and income earners in professions that have not been badly hit by COVID-19. He said buyers value personal and outdoor space more now than they did before.
Saretsky said there has never been more variability in the real estate market. “It’s probably never been more difficult to assess the market as a whole.”
And there has been a “noticeable increase in inventory” in recent weeks for all new listings on the MLS. “Over the last three or four weeks, (listings) are significantly outpacing sales.”
At the beginning of June, the number of new listings for all housing types increased to 1,321 for the Greater Vancouver area, with only 434 sales. This was the highest number of new listings up to that point in the year. In March, before the shutdown, the number of new listings had hit 1,267 and there were 672 sales.
Saretsky said he is keeping an eye on what happens to condo prices in particular because factors that have affected them in the past are now in flux. “Pre-virus, a good chunk of the market buying condos were mom-and-pop investors.”
Now, with the collapse of the short-term rental market and stalled immigration, there are more vacancies. Also, more would-be buyers who are struggling financially are choosing to continue living with roommates or moving back home with parents.
Developer Michael Geller said new condo pre-sales, including several projects on the Cambie Corridor, will likely be marketed differently or “repackaged” to attract buyers with new priorities.
For example, he said, instead of storage areas, those spaces might be labelled as home offices or work stations to appeal to buyers who have shifted from commuting to offices to working from home.
Geller said following pandemics of the past, such as the 1918 flu, architects and builders made changes that became the norm, such as powder rooms to keep guests from using a home’s main bathroom and built-in bathtubs that are easier to clean and disinfect.
Last week, Geller blogged in support of a retractable glass balcony system that would give condo owners the flexibility to convert outdoor balconies into an additional office or other space, but still have easy access to open air.
“Many people are questioning, ‘What happens if I have to be stuck here for months on end, or weeks? How does this fit to my needs?’ ” said Greg Zayadi, senior vice-president at Rennie Marketing Systems, who oversees more than a dozen presentation centres.
Craig Applegath, an architect and urban designer at DIALOG, said developers are already considering a range of responses, from faster, more private elevators to amenity areas with more separate spaces.
He thinks the one habit that will really take hold and continue to be valued after the pandemic is video conferencing. Whether you are in a spacious detached home or smaller condo, there will be a need for comfortable, flexible and quiet areas to jump online and see friends, family and colleagues. He also thinks “personal safety bubbles” will increasingly be important and buyers will want larger lobby areas and more space around elevators so they can maintain physical distancing.
Condo design will also focus on having more spacious outdoor amenity areas rather than emphasizing indoor common rooms, he added