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Real estate near Vancouver’s new transit line is on track for a boom

Kerry Gold, The Globe and Mail, May 16, 2014

As the date for the Evergreen Line launch grows nearer, Coquitlam and Port Moody are increasingly becoming affordable and convenient home buying options for Vancouver buyers.

The new rapid transit line, which will link to the SkyTrain at Lougheed station, will take Port Moody and Coquitlam commuters to downtown Vancouver in less than an hour. It will also link the region with Simon Fraser University.

“Coquitlam condo product is selling less per square foot than it is in Surrey,” says Urban Analytics’ Michael Ferreira. “That’s one of the better places to buy right now.”

But while a lot of buyers hope to see their property investments increase once it’s launched in 2016, there’s debate as to whether a transit line actually translates into dollars. Condos around proposed stations in Coquitlam have mostly flat-lined over the past five years, according to Landcor Data Corp., which tracks the B.C. real estate market. Houses, on the other hand, have gone up. In 2009, the average sale price for a condo in Coquitlam around Burquitlam station, for example, was $211,970. In 2013, the average sale price was $255,815. In 2009, a single-family detached house in the area averaged $720,000 while this year it has averaged $963,000, according to Landcor.

Real estate analyst Richard Wozny, of Site Economics, says that, based on dozens of studies, there’s a hard and fast rule. For existing buildings, such as condo towers in the area, the price will go up about 5 per cent when a rapid transit station enters the picture. For a single-family home that needs to be rezoned, the price will double. For a vacant lot that’s already zoned for multiple families, the price increases about 25 per cent.

“There are tons of existing condo units and they will pour them on like crazy,” says Mr. Wozny. “Brentwood has 10,000 new condo units coming — that’s expressed intention to build. Surrey is going to get 16 stations and offer the same thing.Try to make money in that market as an end user. The supply is overwhelming you.”

Mr. Ferreira says with houses, it’s difficult to differentiate increases that are a result of the transit line and what’s happening in the market in general.

“It’s largely dependent on what the market conditions are around that time,” he says. “If they are strong, demand for housing is strong and prices are typically on the rise, which corrals people towards higher density neighbourhoods and rapid transit lines, that kind of thing.

“I think what you’ll see with the Evergreen Line is not much happening until it’s actually finished. It’s been delayed and talked about for so long that it will just take some time to for people to realize that it’s actually up and running.”

Mr. Ferreira agrees that condo owners could expect to see increases of around 5 per cent. Not that 5 per cent is a bad thing, adds Mr. Wozny. “That’s $25,000 on a $500,000 investment, and that’s a lot, in my opinion.”

Software developer Joe Parkinson lives in a two-level, 1,100-square-foot condo near Coquitlam Centre, overlooking an Evergreen station under construction. He purchased his condo three years ago, after he decided he wanted a better lifestyle than he had in downtown Vancouver. Now he pays $160 per month in condo fees instead of the $400 he was paying downtown. And he is living in a condo that would cost three times the amount in Vancouver. He paid about $450,000 for his Coquitlam condo.

“I was renting a shoebox in Vancouver,” he says. “It would be $2.5-million for this condo. And I can take the West Coast Express 30 minutes to work in Gastown.”

Mr. Parkinson wasn’t influenced by the Evergreen Line when he purchased his condo, and he’s not convinced it will go up in price when the line is finished.

“It didn’t influence my decision, but I think it’s influencing everybody else’s decision,” says Mr. Parkinson. “The detached housing in Coquitlam has done quite well, and it’s nowhere near the line. But for condos, it’s apples and oranges. It’s much different than in the city, where almost everything moves.”

Marketing director Jo Faloona purchased her two-level, 1,100-square-foot Port Moody townhouse for $245,000. Her home is just a five minute walk from the Inlet Centre station.

“Most people in my complex believe that their values are going to go up when SkyTrain comes. We are living in a spot where it’s perfect for young families.

“It’s a house and most of what is coming is condo living, and there are people who don’t want to go into a tower. There will be fewer and fewer walk-ups and that will be beneficial to us. I’m in the sweet spot – close enough to have the convenience of it, and just far enough away to not have anybody walking through my property to get to it.”

Bosa Properties is one of the early developers to build towers around the Coquitlam Evergreen Line. It has sold 70 per cent of one tower at itsUptown project, with construction set to start June 1. The 450 condo project, located a half block from the Evergreen station, includes a new Safeway store. Bosa has plans for two more towers for the area still in the approvals stage. Because the Evergreen Line will connect to Simon Fraser University on the east side, by a five-minute bus ride, he says he’s been getting a lot of interest from parents of university age children.

“We’ve been involved in that property for years, prior to the Evergreen being confirmed there,” says senior vice-president Daryl Simpson. “We would have been involved either way, line or not. But it’s unlikely we would be involved this soon, at this level, without the Evergreen Line happening.”

Once the line is up and running, Mr. Simpson says he can see the surrounding single-family homes rezoned for higher density. “Certainly the prospect of a single-family land assembly will increase as property values go up.”

As for crime, he says that the Evergreen won’t suffer from the poor public image that made it undesirable to live close to a SkyTrain station in the early days.

“In the last decade, that certainly was true, where you wanted to be two or three blocks away. That has changed. There have been a number of very popular, successful urban mixed-use projects that are literally right on top of the station or in the same block. And that market has placed a premium on those. It’s really inverted. Now, generally speaking, the closer you are the better.

“There is a critical mass of ridership that creates a certain comfort level and security and peace of mind at the station that wasn’t there before. I also think we’ve learned a lot since development of those old stations. The new ones are far more open, transparent, brighter, less confined. They just feel more welcoming and as a result don’t attract that same element that you’re talking about.”

That would apply to condos more than houses, however. Houses that are close to the line could potentially decrease in value, due to noise and traffic. But if you’re within walking distance, that’s a good thing.

“If you can walk from your home to the station, that determines the price of your house,” says Landcor’s Rudy Nielsen. “It’s based on walking not driving – about 15 minutes at most would be a comfortable distance.”