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Vacant land sales in 2007 see 12,000 properties change hands

Derek Penner, Vancouver Sun, April 15, 2008

British Columbia experienced a residential land rush in 2007 with buyers snapping up more than 12,000 vacant properties over the year worth more than $3 billion, according to research by Landcor Data Corp.

Vacant land sales were only a fraction of the 158,272 properties worth a record $62.2 billion that traded hands in 2007, but sales of lots rose substantially while overall residential sales waned.

That $62.2-billion value, however, eclipsed 2006 by 15 per cent.

And the number of vacant-land sales in 2007 were more than five times higher than the 2,011 properties that sold in 2001. The value of land sold in 2007 was more than 11 times higher than the $250 million sold in 2001.

"What's really happening is there is a heck of a pile of developers out there making vacant-land subdivisions," Landcor president Rudy Nielsen said in an interview.

Landcor compiles the data from the B.C. Land Title Registry, which registers all sale transactions in the province, not just those conducted to the Multiple Listing Service operated by realtors.

Nielsen noted that overall residential real estate sales have grown from 90,704 properties worth just under $19 billion in 2001. Total sales peaked at 164,315 properties in 2005, though their total value of $47.6 million was below 2006 and 2007.

"We've really come a long way in the last several years," Nielsen said.

The province has also seen some growth in the amount of the land base being carved out and turned into residential real estate. Nielsen said the inventory of vacant properties jumped by some 21,000 over the last year.

Most of those new subdivisions, he said, would have been started two to three years ago, which is typically the length of time Nielsen said it takes to bring a piece of land through the regulatory steps to turn it into housing.

Nielsen added that his own associated firm, NIHO Land and Cattle Co., subdivides about 100 lots a year itself.

"When you look at all the subdivisions around the province [in] Prince George, Kelowna, Vernon, Penticton with a couple hundred lots here, a couple hundred there, it adds up quickly," he said.

In the Lower Mainland, however, vacant residential property is more rare, and comes at an increasingly steep price.

"Right now it's a little tough [to find land], because we're approaching, if we're not already at the peak of the market. And land owners see their land as quite valuable," Ross Gurney, first vice-president of the Greater Vancouver Home Builders' Association said in an interview,

In the Fraser Valley, asking prices are around $1 million -- $1.5 million an acre in Surrey and Langley, Gurney added, which is too high for a lot of developers.

Broken down to building lots for detached houses, 3,000 to 3,500 square-foot lots go for the $270,000 range in Surrey and Langley. Move to south Surrey and they're more than $300,000, Gurney said.

In Port Coquitlam, a new development in the Burke Mountain area has lots for $350,000 -- $450,000, and in Burnaby, Gurney said a quick scan of the MLS system turned up lots ranging from $493,000 to a 6,000-square-foot property with a "breathtaking view" of the North Shore mountains for $868,000.

Gurney, whose day job is manager of business development for TD Bank, said he hasn't arranged a sale for just vacant land in the last three to six months.

"Right now, land owners' expectations are probably a bit high," he said.

Other highlights from the Landcor B.C. 2007 residential sales summary are:

The median price for vacant properties rose 50 per cent to $150,000.

B.C.'s Kootenay region experienced the biggest increase in the value of its total sales, 37 per cent to $1.9 billion for 8,021 properties.

Detached-home sales in the Kootenays declined 9.3 per cent to 3,579 units in 2007, but the median value of homes sold rose 37.4 per cent to $250,000. Condominium apartment sales in the region rose 33.9 per cent to 1,449 units, and their median value rose 23.7 per cent to $190,000.

Detached-home sales in Greater Vancouver declined 9.3 per cent to 22,730 units, while condominium apartments increased 6.7 per cent to 27,793 units. Median house values, which rose 15.1 per cent to $605,000, however, beat out the rise in median apartment prices of 14.9 per cent to $310,300.

At least 9,375 out-of-province people bought property worth $3.8 billion in B.C., as measured by where property-tax assessments were mailed.

Albertans, who bought 6,319 properties worth $2.2 billion were the most prolific purchasers. Calgarians were the most prolific of all Albertans, buying 3,057 second homes worth $1.2 billion.