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UDI/Vancity Housing Affordability Index: In Vancouver, family-friendly condos rare and expensive

Bethany Lindsay, Vancouver Sun, February 12, 2016

METRO VANCOUVER — For the average young family living in Metro Vancouver, price tags for detached homes have climbed so high that there is little hope of ever being able to afford one.

And the alternatives — condos or townhouses with enough bedrooms for the children — are hard to come by in this part of B.C. The Canadian National Occupancy Standard holds that three-bedroom homes are the best choice for couple with two children, but only about a 10th of Metro Vancouver’s housing stock in 2014 was in condos or townhouses that met that standard, according to a report from Vancity.

And, at least in Vancouver, the heart of the region’s affordability crisis, that kind of housing isn’t especially cheap.

“There’s a lot of pressure on that segment of the market, and I would say that they are a pretty hot commodity,” Realtor Faith Wilson said.

The stress is coming from two opposite ends of the market, she added: young families who’ve been priced out of the single-family home segment and seniors who are downsizing after selling their houses.

The three-bedroom condos and townhouses on the market right now are priced from about $500,000 to $19.8 million, with most selling for well over $1 million.

To find prices under $1 million, buyers in Vancouver would need to look to units built in the 1980s and 90s, in a handful of neighbourhoods on the east side, in Marpole or out at UBC. However, Wilson pointed to one bargain currently on the market in the Cambie corridor: a 1,251-sq-ft townhouse selling for $510,000.

Notably, that home on Wethersfield Drive is 38 years old. Throughout the region, settling for something a bit older is a sure way to chop tens or even hundreds of thousands of dollars off a sale price, but is that the best approach to getting good value for your money?

“The advantages and disadvantages will be from the eyes of the purchaser,” Wilson said. “It really depends on what you want.”

But she also cautioned that in Vancouver’s pricey market, older doesn’t always equal cheaper. In hot neighbourhoods like Kits Point, there’s often little difference between the price of a 30-year-old townhome and that of a new one.

Landcor Data Corp. crunched the numbers and found that 119 three-bedroom townhouses built after the year 2000 in Vancouver sold for an average of $1.1 million last year — up from $891,228 five years earlier. Newer three-bedroom condos were even pricier, with 184 suites selling for an average of $1.6 million. Older units tend to sell for a bit less in Vancouver, with average prices in the $700,000-range last year.

To find prices more in line with the median household income of $69,700, the suburbs are the place to be. Surrey is probably the best place in the region to find a reasonably priced attached home for a family — even three-bedroom townhouses built in this century sold for an average of $396,833 in Surrey last year. Older places were even cheaper at an average of $258,860 for a townhouse built before 1985.

Still, there are definite advantages to buying a newer home. Renovations likely won’t be necessary, and modern designs may be more aesthetically pleasing, depending on your taste.

New developments are also more likely to have efficient heating systems, and less likely to need significant repairs like rain-screening or roofing work within the next few years. That’s why Wilson cautions buyers to have a thorough inspection before they finalize a sale.

“You’ve purchased something that’s more within your means, and then you don’t want to be hit with a larger expenditure because you may not have done the full due diligence and homework you should have done at the front end,” she said.

Aging townhouses can be particularly problematic, according to Joanna Alexander, director of business development for Pacific Quorum Property Management.

“Older townhomes for some reason seem to be a little bit more rundown. You can get the condominiums that have been very well maintained, but the townhome from 20 years ago isn’t,” she said.

Security can also be an issue for older townhome developments. They tend to have individual carports instead of underground parking, and aren’t as likely to be in gated communities.

But there are some major drawbacks to newer homes as well. For one thing, space can be an issue for a growing family if they choose to go the condominium route.

Condos built more than 20 years ago tend to be a lot roomier, according to Alexander.

“Bedrooms would be bigger, living rooms would be bigger. You’d get a 1,000 to 1,200-square-feet three-bedroom condominium, whereas now, even the two bedroom and dens are often under 900 — sometimes under 850 square feet,” Alexander said. “It’s tiny house living.”

For people who’ve spent their lives in Vancouver, or transplants from other parts of Canada, that doesn’t sound like much space. But for new arrivals from big cities in China, the Philippines or India, 800 square feet might seem perfectly comfortable for a family of four.

“It’s a wonderful opportunity to have a new place if they can afford that. They make it work,” Alexander said.

Townhouses from previous decades are also more likely to come with small yards — a definite selling point for young families.

And Alexander pointed out that buying a new unit also comes with risks like the possibility of construction defects, and maintenance fees that have been kept unrealistically low to entice buyers.

The real trick, according to Wilson and Alexander, is getting your hands on any three-bedroom unit before it gets snatched up by another eager buyer.

“I think that developers are certainly recognizing that this three-bedroom is something that they should be building more of,” Wilson said, but she advises buyers to find a clued-in real estate agent who can help them pounce on opportunities as soon as they come up.

Even condos with two bedrooms and a den are hard to come by in newer developments, according to Alexander, who estimates that up to three quarters of all new units feature just one or two bedrooms.

Cities like Surrey and Richmond have the most ready supply of three-bedroom attached homes, making up 13 and 17 per cent of the housing stock in 2014, respectively. Inside Vancouver, that proportion falls to less than five per cent.