The average price per-unit of a Vancouver rental apartment building is now north of $200,000 in what remains a "seller's market", according to a survey by NAI Commercial, Vancouver.
During 2010, sales of apartment buildings across Metro Vancouver totalled 82 wood-frame buildings, up from 80 a year earlier, with a total of 2,262 apartments, and an average price of $136,065, up 13.1 per cent from 2009. In the City of Vancouver, the average price rose to $200,006, up nearly $40,000 per-suite from 2009. Last year also saw the sale of seven concrete apartment buildings, with a total of 569 suites, at an average per-suite price of $240,097, compared to an averaqe of $209,815 a year earlier.
The performance of the multi-family rental market has attracted real estate investment trusts, such as Canadian Apartment REIT, as the sector "is considered one of the few safe places to invest," NAI notes.
The high prices have not deterred buyers. in Vancouver's West End, for instance, the average price-per-suite rose 34.7 per cent to $219,915 yet "West End buildings are being sold within days of being listed."
NAI picks the Metrotown area of Burnaby as the potentially hottest market in 2011, because of relatively lower prices, at $148,291 per suite, and the demand for redevelopment sites in the area.
The entire multi-family market will be a top performer in 2011, agrees Avtar Bains, executive vice-president of Colliers International.
"There is no question that the multi-family market will remain strong," Bains said. He noted that the low vacancy rate - around 1.5 per cent - little increase in new product and an expected 40,000 newcomers to Metro Vancouver will keep apartment sales and values rising.
