Developers bullish on Metro condominium market
Tracy Sherlock, Feb. 2013, (THE VANCOUVER SUN) — Sales of new condominiums slowed in the second half of 2012, but there has been an uptick in activity during the first six weeks of the new year, said Jeff Hancock, a senior manager with real estate market firm MPC Intelligence.
“There were some moments of brilliance, for sure – there were some products that did really well in the second half of the year as well,” Hancock said Tuesday after the release of his firm’s Condominium Market Opportunities Report.
Two successful projects he cited were Intracorp’s MC2 at Cambie Street and Marine Drive and Station Square, which is the first phase of a new community near Metrotown that is being built by Anthem Properties and Beedie Living in Burnaby.
“They were close to selling out,” Hancock said. “Definitely a high percentage of available units sold.”
Station Square is a five-tower development in Burnaby near Metrotown that will be ready for occupation in 2015. Units are priced from $280,000 for a studio apartment up to $1.35 million for a penthouse suite.
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. Rennie Marketing Systems is selling the project.
Hancock said the units were sold for close to asking prices.
“Those projects were both well-priced, to begin with, for their respective markets,” Hancock said. “They both boast transit-oriented locations, which is really important in today’s market.”
He said these types of projects often charge a little less than other projects because they are specifically targeting investor and first-time buyers that will utilize transit.
Both investors and first-time buyers were purchasing, Hancock said.
“(There were) probably more investors than first-time buyers, but the two major reasons that they performed as well as they did was the price point they were asking, and the fact that they were large-scale, well-marketed, transit-oriented developments,” Hancock said.
He said 2012 saw more new condo units sold than 2011, and that 2013 has started well.
“We have seen an uptick in the first five weeks of the new year – there has definitely been an increase in the amount of traffic compared to the later fall,” Hancock said. “The number of sales being reported by developers seems to have picked up a little bit in late January and early February.”
He said traffic was brisk this weekend at the preview of Wall Centre Central Park, a new development near Metrotown on the Vancouver side of Kingsway. “There was a high volume of people coming through. It was really, really busy, which is great,” Hancock said. “They may not be writing deals yet, but from all initial indications it looks like that will be a really popular development.”
At Polygon Homes, the projects that are selling well right now are those that are ready to move in before March 31, said Neil Chrystal, Polygon’s president and chief executive officer. Polygon is seeing a lot more people who intend to live in their homes, rather than investors, Chrystal said. “The other thing that is really prevalent is that first-time buyers are really stepping up right now.”
He attributes these sales to the $10,000 grant for first-time homebuyers that expires March 31. The bonus is a one-time refundable personal tax credit, equal to five per cent of the purchase price of a new home to a maximum of $10,000.
“We’re seeing a lot of action where homes are ready to move in before March 31,” Chrystal said. “We have a few sites we’re pre-selling, and they’re doing OK.”
Polygon’s Red Maple Park development in Langley is ready to go and selling well, with two and three-bedroom townhouses priced between $289,900 and $329,900.
Chrystal said that in the last couple of years Polygon has not delayed or cancelled any projects due to the slowing market. “We come up with a plan and we adjust it – it’s very hard to predict the future. For the most part we feel pretty good about the housing market,” Chrystal said. “The big reasons are the low mortgage rates and strong immigration. We continue to see a lot of people coming from abroad and wanting to live in Vancouver. If there are going to be 40,000 new people coming to B.C. this year, the majority of them come to Vancouver and that creates real demand for housing.”
MPC Intelligence is predicting that 2013 will be relatively flat for both sales and pricing.
“We may even see some price compression in some markets. Prices could go down or developers could start to incentivize or negotiate a little bit more to keep up a relative pace of sales,” Hancock said.
“I think developers recognize that in certain areas they’re going to have to sharpen their pencils to generate sales.”
He said he’s heard rumblings about developers postponing sales or construction until they meet their targets.
“That’s one of the things about the Metro Vancouver market that is reassuring. We have a lot of sophisticated developers that have deep pockets and who can hold their breath if they need to,” Hancock said. “You’re going to see guys who don’t have to launch product into the market – you will see them delay with no problem and control the supply.”