Chilliwack is 102 kilometres east of Vancouver but light years away when it comes to affordable housing, a fact that is enticing major employers and new residents to one of B.C.’s fastest-growing regions.
The average price of a Chilliwack home is less than $480,000, compared to more than $1 million in Greater Vancouver. The average monthly rent for an apartment in Chilliwack is $887, according to Canada Mortgage and Housing Corp., a price that is also about half of what it costs in Vancouver.
As in all of B.C., Chilliwack’s housing sales have fallen, down 38 per cent in October 2018, as an example, from a year earlier. But, as the Chilliwack and District Real Estate Board (CADREB) notes, 2017 saw a “frenzied pace” that set an annual sales record.
“The market has returned to better balance,” noted Lori Maier, CADREB president.
The commercial market, however, is moving towards a seller’s advantage.
In the first nine months of last year, Chilliwack commercial building permits virtually doubled from a year earlier to $34.2 million while residential building permits hit $145 million, down from $171.5 million from the white-hot pace of 2017.
On the industrial side, the massive new $200 million Molson Coors brewery, which relocated from Vancouver, is ascending on a 35-acre site next to the Trans-Canada Highway. It is taking 1,000 workers to build the 400,000-square-foot plant, and about 100 employees will be required for Molson’s biggest brewery in Western Canada when it completes this summer.
Molson joins other major employers, such as Ritchie Bros. Auctioneers and John Deere, in providing a solid economic base that is fuelling industrial demand, according to Chilliwack commercial real estate agent Rick Toor.
But, Toor cautioned, it is getting harder to find enough industrial space to meet demand.
Most of the new industrial space under development has already been claimed, including a 60,000-square-foot building that opened as a build-to-suit in the Highway Business Park last fall. Only 25,000 square feet of new industrial speculation was underway as of the third quarter of 2018, and it is not expected to last long on the market.
Industrial prices reflect the demand. Two recent deals saw a 12,700-square-foot building sell for $3.15 million in July – that is $248 per square foot – and a 1.4-acre industrial package with a self-storage outlet on Industrial Way sell last year for $10 million, according to Avison Young and RealNet data. That price was $2.4 million above its assessed value.
Toor has just listed a one-acre serviced industrial site on Enterprise Drive, one of the few parcels still available in Chilliwack, at $1.8 million.
Brian Coombes, president of Chilliwack Economic Partners Corp., noted that about 30 acres of industrial land is available in the agricultural business zone where Molson Coors is located. He added that the City of Chilliwack has an “employment land strategy” as it attempts to match demand with potential industrial sites. This will involve working with private landowners and First Nations, Coombes suggested.
Retail vacancy is also tight in the shopping malls of Chilliwack, and the slightly higher vacancy in the downtown is being addressed by an aggressive new development.
After winning a bid for a city-owned 3.7-acre parcel, the Algra brothers of Abbotsford have launched a visionary downtown project known as Five Corners.
Five Corners is expected to transform Chilliwack’s downtown into a European-style working and living, pedestrian-friendly district. The redevelopment will see a combination of retail, commercial and residential as part of the multi-year, multi-phase project that will “provide a balance of jobs, amenities and housing to create a diverse and inclusive downtown core,” according to a city statement.
Algra Bros. Developments Ltd. is owned by Dave, Peter and Philip Algra. The brothers are known throughout Chilliwack for high-quality construction and developments such as Garrison Crossing, an award-winning mixed-use project on former military lands.
Algra officially began work on the Five Corners site in December. Dave Algra said it will include 50,000 square feet of retail space and 120 to 130 homes, both rental and strata.
The first-phase plan is to have half the retail and up to 20 housing units complete in 2019, he said.
The City of Chilliwack has been investing in the downtown core for over two decades. New facilities like the Chilliwack Cultural Centre, the Landing Leisure Centre and the Prospera Centre helped establish the area as a hub for activity. Streetscaping, utility upgrades, park development and greening have also been strategically implemented.
Algra’s residential component may lean towards rentals, if current housing trends persist. Chilliwack currently has a tight 1.7 per cent rental vacancy rate and both rents and per-suite prices are increasing.
“A few years ago, old apartment buildings from the 1970s were selling for $85,000 a door,” Toor said. “Now they are $150,000 to $160,000 per door.”
Multi-family capitalization rates are in the 4 per cent to 5 per cent range now, down from close to 6 per cent two years ago, Toor estimated.
It appears that Chilliwack is becoming closer to Metro Vancouver every year.