The developer of the 35-storey Flamingo condo tower in the Whalley area of central Surrey claims that parents investing for their children were largely responsible for a $200 million buying blitz that saw all but 10 of the tower’s 375 condos sell out in 20 hours during the November 20 -21 weekend.
“We had a lot of moms and dads buying for their kids,” said Charan Sethi, president and founder of Tien Sher, of the near sell-out of the first of three residential towers he is building on a 4.5-acre site on King George Highway that once held the Flamingo Hotel.
The parents, he said, were buying mostly studio and one-bedroom units, priced from approximately $320,000, either for the children’s immediate use or to hold as rental units and a hedge against rising home prices.
Flamingo condo units range from 325 square feet to 1,782 square feet, and, even at per square-foot-prices of more than $940 per square foot, they are considered affordable for new concrete construction product in Metro Vancouver.
The Flamingo won’t complete until 2025, and Sethi suspects Surrey condo prices will be higher by that time.
The average price of a condo apartment in central Surrey, which is a SkyTrain hub and the city’s commercial and civic core, had increased 17.5 per cent from a year earlier to $456,000 as of October 2021, according to the Fraser Valley Real Estate Board. Meanwhile, active listings of resale condo apartments in central Surrey have plunged 34 per cent year-over-year.
Sethi noted that labour and construction costs are increasing, and Tien Sher has been warehousing roofing and other building materials for months as protection against rising prices.
Buyers at the Flamingo, he said, can put down 20 per cent to secure their unit at today’s price and complete the purchase when the tower is completed in about two-and-half years.
Moms were not the only Flamingo investors. Vancouver’s Real Estate Investment Group (REAG) was also active at the Flamingo’s launch, which was heavily promoted by REAG founder Ozzie Jurock. REAG members have purchased up to 20 per cent of Tien Sher’s Surrey condo projects in the past, according to Sethi.
“We have done very well with Tien Sher projects,” Jurock said.
The success of the first tower has persuaded Sethi to move up the launch of the second phase of the overall Flamingo development, which includes two mixed-use towers with more than 500 condominium units. Tien Sher plans to begin marketing these early in 2022.
The Flamingo blow-out is not unique.
According to Key Marketing, its agency has pre-sold six Surrey condo projects this year, with a total of 1,400 homes.
“Each of the six developments [Belvedere, by Square Nine Developments; Q5, by Tien Sher; the Oak & Onyx, Viktor and Melrose projects, all by ML Emperio Properties Ltd; and Flamingo] sold out at record speed and prices in time frames ranging from eight hours to five days,” Cassidy Le Troy, brand manager at Key Marketing told Western Investor.
Metro Vancouver saw a record of 15 new condo projects, with a total of 2,525 units, released this October, according to MLA Canada, which tracks the new condo market across Metro Vancouver.
“October saw the largest release of inventory in a single month this year, yet our same-month absorption remained steady at 40%,” said Suzana Goncalves, executive vice-president of sales and marketing and a partner at MLA Canada. “Resale supply continues to decline which is pushing buyers to the presale market.”
The average pre-sale prices for a new condo in Metro Vancouver is now from $1,050 to $1,150 per square foot, based on recent pre-sale data.
November will see a total of 1,796 pre-sale condos released in 13 projects, MLA forecasts, in noting that many developers have moved up launch dates in the face of high pre-sale demand.