The developer of a new downtown Victoria condominium tower will offer a price discount, but the deal hinges on favourable construction financing from BC Housing and comes with some strings attached for buyers.
“It is a risk-reward situation for us,” said Byron Chard, chief financial and acquisitions officer with Chard Development Ltd. of Victoria, of its 20-storey Vivid at the Yates mixed-use residential project.
Chard Development, which is an active Victoria developer, approached BC Housing with the proposal, Chard said.
“We are receiving construction financing with 100 per cent of our costs covered through BC Housing at a preferred interest rate,” he said.
The savings on the $50 million in financing, he explained, are being passed on to the buyers in the 135-unit tower as a means for the company “to give back to the community.”
Chard Development began working with BC Housing a year ago under the former BC Liberal government, Chard said of the first such initiative in the capital city. Chard will offer one- and two-bedroom condominiums exclusively at a discount of 8 per cent below current market value. All purchasers must commit to living in the suite for a minimum of two years and must demonstrate a household income of less than $150,000, with preference given to households with income less than $125,000. Buyers must also put down a 10 per cent deposit and demonstrate sufficient financing.
According to the Victoria Real Estate Board, the benchmark price of a Victoria condominium apartment has increased 21 per cent in the past year, with a typical resale condo in the city now selling for $421,400.
Chard will offer Vivid at the Yates one-bedroom condos from about $275,000, with two-bedrooms from about $550,000, Chard said. “This will attract what we are calling workforce housing – individuals who work and live in downtown Victoria.”
The risk for Chard is that under the financing agreement, the developer must reach 100 per cent pre-sales before the financing is released, he said. Its most recent Victoria condominium project took three years to reach a sellout, he said, with the last unit sold as the building was nearly complete.
Chard expects the condo tower to complete in 2020.