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Vancouver rental apartment prices nudge $500,000 per door

Average price per-door for mostly older apartments up 47% in a year
Vancouver rental apartment
This older apartment building in Vancouver recently sold for $750,000 per suite.

The average cost per-suite of a Vancouver rental apartment building, normally an old structure, is now $498,000, up 47 per cent from mid-2015, according to a survey by Mark Goodman and David Goodman of HQ Real Estate Services in Vancouver.

Across Metro Vancouver, the per-door price for a multi-family rental is now $380,000, up 60 per cent from a year ago, the Goodmans state in their most recent Goodman Report. The sales volume surged 142 per cent  to $1.1 billion in the first six months of this year, compared to the same period in 2015.

The total number of rental suites sold in Vancouver is up 123 per cent from the first half of 2015, at 1,443 units. The dollar volume so far this year is north of $700 million. 

A recent Vancouver transaction reveals that some buildings are attracting mind-boggling prices well above the average.

The 69-year old, wood frame rental apartment building in Kitsilano (shown in photo) sold for $4.5 million, or $750,000 for each of the six units in the West 6th Avenue project, where rents average $1,680 per month. The building, configured into two-bedroom suites, sold after multiple offers for $50,000 above the list price, according to NAI Commercial, which sold the project. The capitalization rate is a low 2.1 per cent. The property was assessed in July 2015 for $2.9 million, with the value of the building at $199,000; the land at $2.7 million.

Approximately 28 per cent of the sales this year have been to developers who based the price on land value, rather than income, according to Mark Goodman."This has contributed to the sharp increase in average price-per-unit," he explained.

Goodman added that the total universe of apartment rental stock in Metro Vancouver has increased by only 2,488 units in the past five years, to 104,457 apartments.