Transit corridors fuel sustained demand for condos in Metro Vancouver

The number of sales may be down in multi-family developments, but buyers are  still keen on new homes in highrises near transit lines, Colliers  International’s most recent residential real estate report for Metro Vancouver  found.

Three developments in particular — Station Square and Solo District, both in  Burnaby, and MC2 in Vancouver — were bright spots in the report, which said that  overall multi-family sales were down 15 per cent in the third quarter of 2012,  to 1,899.

“This is the second consecutive quarter in which sales volumes have  decreased. However, despite all the crash talk, the sales volume posted this  quarter and year to date is evidence of sustained demand for new multi-family  homes in the Metropolitan Vancouver market,” said Scott Brown, senior  vice-president, Colliers Residential group.

He said demand in the resale market is softer than demand for presales  because presales tend to attract investors, particularly if they are near  transit and will be attractive to renters.

“The ones that are selling the fastest …. are on transit and appealing to  investors,” Brown said. “The buyers are a little bit more concerned about the  immediate, short-term future, but there still is demand there and their belief  in the long-term fundamentals of the Vancouver market is why they’re investing  in these properties.”

Station Square is a five-tower development in Burnaby near Metrotown that  will be ready for occupation in 2015. Units were priced from $280,000 for a  studio apartment up to $1.35 million for a penthouse suite.

The first building of 269 units is mostly sold out, after about three months  of a soft opening and a public opening Oct. 20, said Greg Zayadi, director of  sales and marketing for Anthem Properties, which is a partner of the Beedie  Group on Station Square.

“The location is key,” Zayadi said, adding that buyers want to be close to  SkyTrain and Metrotown. He said most of the buyers are what he calls “family  investors”: people who are buying with the plan that someone in their family  will eventually live in the suite. He said 40 per cent of buyers at Station  Square already have an address in Burnaby, while 30 to 35 per cent have an  address in Vancouver.

Although they have addresses in the Lower Mainland, those might be homes of  relatives, Zayadi said.

“Approximately 70 per cent of highrise sales occurred at developments  targeting the Chinese buyer. While it is evident that the Chinese buyer is not  as active as in recent years, this purchaser group does continue to be the  primary buyer in Vancouver and Burnaby,” the Colliers report states.

Realtor Sunny Lee, who sold seven units in Station Square, said most of the  people he sold to were investors, and that some were buying for their children.  He said he believes Station Square sold so well because it is very close to  SkyTrain, but not so close that the noise is a factor.

He said this year he has sold more pre-sale new homes than re-sale homes,  which is unusual for him.

“Buyers are concerned about the current market, but they still believe in the  future,” Lee said, adding that people are looking for a good investment in this  low-interest rate environment. “They want to put their money somewhere.”

He said buyers of pre-sales usually put between five and 10 per cent down  when they sign the contract, then another five to 10 per cent about six months  later, with the remainder due when they move in.

The Colliers report also mentioned Appia’s Solo District development in  Brentwood as selling well.

Looking ahead, in the fourth quarter of 2012 two projects are expected to  keep sales flowing: Mosaic’s Elizabeth, near Queen Elizabeth Park, and  Intracorp’s MC2.

MC2 is a two-tower development on Marine Drive and Cambie Street in  Vancouver, directly across the street from the Canada Line. There are 443 homes  in 26-storey and 32-storey towers, with prices for one-bedroom suites starting  at $259,000 and two-bedroom suites at $421,500. The project opened for sale Oct.  27 and since then has sold 347 homes, said Linda Chu, director of marketing for  Rennie Marketing Systems, which is selling the project.

Brown said people downsizing from single-family homes are also driving  multi-family sales. He said developers are starting to build larger multi-family  units — bigger than 1,000 square feet — to appeal specifically to downsizers  rather than investors.

The Colliers report calls for annual sales volumes of 10,500 multi-family  units in 2012, with a similar amount projected for 2013.

Canada Mortgage and Housing Corp. says housing starts in Metro Vancouver are  forecast to remain flat in 2013.

Although the 2012 sales numbers of multi-family units are down more than 10  per cent from 2011, 2012 stands to be the second-best year for multi-family  sales since 2007, the Colliers report said.

“2011 was an outstanding year. 2012 is a very good year,” Brown said. “We  think 2013 will be about the same.”

Source: The Vancouver Sun