The number of sales may be down in multi-family developments, but buyers are still keen on new homes in highrises near transit lines, Colliers International’s most recent residential real estate report for Metro Vancouver found.
Three developments in particular — Station Square and Solo District, both in Burnaby, and MC2 in Vancouver — were bright spots in the report, which said that overall multi-family sales were down 15 per cent in the third quarter of 2012, to 1,899.
“This is the second consecutive quarter in which sales volumes have decreased. However, despite all the crash talk, the sales volume posted this quarter and year to date is evidence of sustained demand for new multi-family homes in the Metropolitan Vancouver market,” said Scott Brown, senior vice-president, Colliers Residential group.
He said demand in the resale market is softer than demand for presales because presales tend to attract investors, particularly if they are near transit and will be attractive to renters.
“The ones that are selling the fastest …. are on transit and appealing to investors,” Brown said. “The buyers are a little bit more concerned about the immediate, short-term future, but there still is demand there and their belief in the long-term fundamentals of the Vancouver market is why they’re investing in these properties.”
Station Square is a five-tower development in Burnaby near Metrotown that will be ready for occupation in 2015. Units were priced from $280,000 for a studio apartment up to $1.35 million for a penthouse suite.
The first building of 269 units is mostly sold out, after about three months of a soft opening and a public opening Oct. 20, said Greg Zayadi, director of sales and marketing for Anthem Properties, which is a partner of the Beedie Group on Station Square.
“The location is key,” Zayadi said, adding that buyers want to be close to SkyTrain and Metrotown. He said most of the buyers are what he calls “family investors”: people who are buying with the plan that someone in their family will eventually live in the suite. He said 40 per cent of buyers at Station Square already have an address in Burnaby, while 30 to 35 per cent have an address in Vancouver.
Although they have addresses in the Lower Mainland, those might be homes of relatives, Zayadi said.
“Approximately 70 per cent of highrise sales occurred at developments targeting the Chinese buyer. While it is evident that the Chinese buyer is not as active as in recent years, this purchaser group does continue to be the primary buyer in Vancouver and Burnaby,” the Colliers report states.
Realtor Sunny Lee, who sold seven units in Station Square, said most of the people he sold to were investors, and that some were buying for their children. He said he believes Station Square sold so well because it is very close to SkyTrain, but not so close that the noise is a factor.
He said this year he has sold more pre-sale new homes than re-sale homes, which is unusual for him.
“Buyers are concerned about the current market, but they still believe in the future,” Lee said, adding that people are looking for a good investment in this low-interest rate environment. “They want to put their money somewhere.”
He said buyers of pre-sales usually put between five and 10 per cent down when they sign the contract, then another five to 10 per cent about six months later, with the remainder due when they move in.
The Colliers report also mentioned Appia’s Solo District development in Brentwood as selling well.
Looking ahead, in the fourth quarter of 2012 two projects are expected to keep sales flowing: Mosaic’s Elizabeth, near Queen Elizabeth Park, and Intracorp’s MC2.
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 and since then has sold 347 homes, said Linda Chu, director of marketing for Rennie Marketing Systems, which is selling the project.
Brown said people downsizing from single-family homes are also driving multi-family sales. He said developers are starting to build larger multi-family units — bigger than 1,000 square feet — to appeal specifically to downsizers rather than investors.
The Colliers report calls for annual sales volumes of 10,500 multi-family units in 2012, with a similar amount projected for 2013.
Canada Mortgage and Housing Corp. says housing starts in Metro Vancouver are forecast to remain flat in 2013.
Although the 2012 sales numbers of multi-family units are down more than 10 per cent from 2011, 2012 stands to be the second-best year for multi-family sales since 2007, the Colliers report said.
“2011 was an outstanding year. 2012 is a very good year,” Brown said. “We think 2013 will be about the same.”
Prospective buyers view a model of the Station Square development in Burnaby.
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