VANCOUVER – Despite the persistent buzz of “bubble trouble” in the Vancouver condo market, sales of new multi-family developments have been brisk through the first two quarters of 2012, and signs are good for continued growth this year.
First Quarter sales of new multi-family dwellings were up 79 percent from the Fourth Quarter of 2011, and 48 percent over the same quarter last year according to Colliers International’s First Quarter MarketShare report on the residential real estate market in Metro Vancouver.
“We will be out gathering data for our Second Quarter report in July, but polling we’ve done so far is telling us that sales stayed strong through this last quarter,” says W. Scott Brown, senior vice president of residential marketing and sales services for Colliers International.
New properties are being absorbed quickly into the markets in Vancouver – Downtown, Vancouver – West, Burnaby, Tri Cities, Richmond, and South Surrey. Downtown, sales at Telus Gardens and 999 Seymour accounted for 500 of 579 sales in the First Quarter. Similarly, pent-up demand for townhouse and high rise product in Vancouver – East is fueling excitement for the release of new projects in the Hastings corridor anticipated later this year.
Currently, the most competitive market areas include Southeast False Creek, Metrotown, Surrey Central and Cloverdale/Langley.
“The Vancouver market is really driven by location, specifically proximity to transit,” says Brown. “We’re seeing a lot of new developments along the Canada Line, and in places like New Westminster and Surrey. Development sites are in high demand anywhere along the transit corridors.”
Demand for low rise and high rise condo development in the Burquitlam neighborhood of Coquitlam has been influenced by the approval of the Evergreen Line, and is expected to positively affect developments in the area.
One of the biggest challenges for development in Vancouver is finding suitable land.
“It’s a highly competitive market for development land in central Vancouver. It’s very hard to find, unless developers are willing to get creative with in-fill,” says Brown.
Further out in the Fraser Valley, where more inventory is available, developers are buying land and holding on to it until the they see a gap in the market before they start building.
“Right now we’re seeing the release of some real A-class developments across Vancouver,” says Brown. “As long as developers keep advancing quality opportunities, Vancouver generally does a good job of managing supply and avoiding market saturation.”
Looking ahead, Brown is confident in the strength of the new multi-family housing.
“Market forecasts only tell part of the story,” he says. “We also look at consumer trends to give us a more complete picture.”
The growth of the baby boomer downsizer demographic, continued migration into Metro Vancouver, and greater focus on marketing to investors in Hong Kong and China are expected to sustain demand.
“Expect to see things slow a bit over the summer, and then pick up again the Fourth Quarter,” Brown offers. “Next year I expect to see continued growth.”
Source: The Vancouver Sun