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British Columbia has become a field of dreams for
homebuilders and homeowners alike. Remember the
catch line from the movie? It was, “If you build
it, they will come.”
That memorable phrase applies to
almost anything with four walls and a rood on
Canada’s West Coast. A booming economy, a surge
in immigration and a shortage of land in the
Lower Mainland means the demand is at gold rush
levels and prices are soaring.
“We are looking at our third
best-ever year for new construction,” says Peter
Simpson, chief executive officer for the Greater
Vancouver Home Builder’s Association. “We have
just revised estimates for housing starts up to
20,500 this year. The major challenge our
members face, however, is a shortage of land.
There is just not a lot available.”
The market for resale homes is
equally brisk, says Rick Velouche, president of
the Real Estate Board of Greater Vancouver. Its
8,600 agents have about 13,000 properties listed
for sale in the Lower Mainland, down from a
third from the usual supply on hand.
“Over the past two years, we have
seen resale prices rise by 46%,” he says. “The
only bargains left are well outside the city.
The farther you have to drive, the better the
prices.”
Nor is the Vancouver area the only
centre of buying and selling activity. Thanks to
new regularly scheduled services by airlines
such as WestJet, recreation and weekend
properties on Vancouver Island, The Gulf
Islands, Queen Charlotte Island and the
interior, especially in the Okanagan Valley, are
in high demand.
“Accessibility is the biggest change I have seen
in 35 years of business,” says Rudy Nielsen of
Landcor Data Corporation, which tracks all
residential sales in the province. “Regularly
scheduled flights at reasonable prices have
opened up great new chunks of the province. They
have created a boom in prices.”
That boom is reflected in sales
figures. Last year B.C. saw 166,254 residential
properties change hands, compared with 143,698 a
year earlier. Those properties sold for a
cumulative total of $48.5 billion, compared with
$37 billion in 2004. By comparison, the value of
all residential sales in British Columbia was
just $15.9 billion in 2000.
At the same time, there is a
fundamental shift taking place in British
Columbia’s residential market. Rising costs of
single-family homes have seen condominiums take
over leadership of the new home of choice,
especially in the Lower Mainland.
Where, five years ago, Vancouver
new construction represented just 40% of all
condos built in this province, this year the
Lower Mainland is home to 80% of all new condos
right across B.C., Mr. Simpson says.
“A great part of that is because
of cost,” he says. “Today, 94% of all new single
family homes cost more than $350,000. People are
willing to accept smaller spaces in high or mid
rise structures or townhomes because that is
what their budget can afford.”
But even then, a dramatic shortage
of land in Vancouver is driving prices sky-high,
says Bob Rennie, president of Rennie Marketing
Systems, which has about 50 condo projects on
the go in British Columbia.
“Right now, 80 projects are
selling at more than $600 a square foot and
others range up to nearly $2,000 a square foot.
It is all because of a shortage of land,” he
says.
The price of condos, however,
seems reasonable compared to the selling prices
of homes in West Vancouver, where neighbourhoods
command the highest selling price in Canada.
“The average home price here was
$1.485 million last year and I think you can
reasonably expect that to go up again this
year,” says Eric Chistiansen of Angell Hasman &
Associates (Eric Christiansen) Realty Ltd.
“Right now there are only 230 properties for
sale in West Vancouver, compared to 308 last
year. In fact, there are only about 1400
properties of all kinds for sale on the North
Shore right now.
“At any given times, there will be
10 buyers looking for a property with a
oceanview and when one comes up about every
three months, all 10 will bid on it.”
Nor are sky-high prices restricted
to the Lower Mainland.
Kelowna on Lake Okanagan has projects such as
the Royal Private Residence Club, where
top-of-the-line condo units go for up to
$2,289,000
The housing boom is also changing
the province’s demographics. Surrey is within a
hair’s breadth of overtaking Vancouver as
British Columbia’s largest city, Mr. Velouche
says.
“The farther out you go, the lower
prices become,” he says. “That is what accounts
for the growth centres east of Vancouver. It is
the only direction growth can take. You have the
U.S. to the south, the ocean to the west and the
mountains to the north.”
The problem there, however, is
that the province has strict controls over
changing the use of existing agricultural land
and that policy represents a bottleneck to
growth. Even with relatively cheaper land,
housing costs as far east as Pitt Meadows, a
half hour’s drive from Vancouver’s city limits,
can present challenges to first time buyers.
“I would think the average
single-family house would go for $400,000, a
townhouse for $260,000 and a condo for
$214,000,” Mr. Velouche says. “Last year, the
same condo wouldn’t sell for $190,000.”
Nor is there much relief in sight for
hard-pressed buyers, suggests Neil Chrystal,
president of Polygon Homes Ltd.
“Once again the province is
attracting significant immigration,” he says.
“Last year, for example, we had almost 43,000
people more here from outside and inside Canada.
That’s 43,000 people looking for a place to
live.”
“With built in demand like that,
the market seems very highly to continue
strong.” |
