The residential market is shifting towards rental demand, according to Remco Daal, president and CEO of Bentall Kennedy. And while Daal was referring to the United States, condominium developers say the same trend is becoming apparent in B.C.’s Lower Mainland.
“Over the next 10 years we will see a flight to rentals in the U.S.” Daal told a commercial real estate meeting May 17 in Vancouver. In past few months, Bentall has invested $1.6 billion in U.S. apartment buildings and is currently in joint venture deals to build new rental buildings in Seattle and Chicago.
“Rentals are a deep trend,” Daal said, “We have a generation of Americans who have lost a home to foreclosures” or seen family and friends lose money buying a house or a condo, he explained.
Bill Morrison, president of Vancouver-based Pilot House Marketing Ltd. said demand from rental investors, not owner-occupiers, is a major driver of the condominium market, particularly in low-cost projects. On May 17, all but four of the 108 condominium units in the Connect project in Surrey sold out in one hour, he noted. At least half of the buyers were investors, who were snapping up condos from $118,900 with a discounted mortgage rate for three years.
Of the 3,350 potential buyers who registered at the low-priced 500-unit Wave project in Central Surrey, Morrison estimated that 30 per cent were investors and a further 30 per cent were “parents who said they were buying for their children.”
At the Ascend condo project in Surrey, Fifth Avenue Marketing Ltd. is selling one-bedroom condos for around $200,000, or about $318 per square foot. Forty per cent of the Ascend buyers are investors, according to First Avenue marketing agent Sean Mahoney.
