The 15 per cent foreign buyer tax rolled out last year has certainly slowed down the market. In prime markets like West Vancouver, price reductions on homes have been between 20 and 30 per cent in order to get homes sold. Our editor Frank O’Brien takes a look at how the Greater Vancouver market is faring, one year after the tax was introduced.
A year after the introduction of Canada’s first foreign-home buyer tax drove Metro Vancouver sales down 44 per cent, the three most popular markets for foreign buyers have yet to recover.
West Vancouver, Richmond and the Westside of Vancouver – all areas with the highest proportion of foreign buyers prior to the implementation of the 15 per cent tax on August 2, 2016 – are all seeing lower sales now than in 2016.
West Vancouver and Richmond are also the only major municipalities with house prices lower now than a year ago, and house prices have flat lined on Vancouver’s Westside, according to recent Real Estate Board of Greater Vancouver data.
Only 52 detached houses sold in West Vancouver this August, down from 72 in August of last year and benchmark house prices have fallen by 6.3 per cent, the biggest drop in the Metro region. Realtors say the price plunge is more dramatic at the high end of the market.
“There, we have seen price reductions of 20 per cent to 30 per cent,” said Brent Eilers of Remax Masters Realty in West Vancouver. According to Eilers, foreign buyers today immediately discount any asking price by 15 per cent to compensate for the tax “and then begin negotiations downward.”
He points to a view-property house on Russett Way in West Vancouver that was listed last year at $4.6 million. After four price reductions, it recently sold for $2.8 million.
“The market is extremely sluggish,” Eilers said.
In Richmond, where foreign buyers accounted for 10 per cent of housing sales prior to the foreign-home buyer tax, according to provincial government studies, the August benchmark price of a detached house was down 0.9 per cent from a year earlier.
This compares with a 43 per cent price increase in the previous 12 months.
In the last year, Richmond detached sales have dropped 31 per cent to 959 houses. The benchmark price for a Richmond house in August was $1.57 million, down from $1.7 million in August 2016.
On Vancouver’s West Side, detached housing sales so far this year are down 42 per cent from the same period in 2016 and, as of August, the benchmark house price had been shaved by an average of $135,000 to $3.5 million.
Neil Hamilton, a senior property advisor with Macdonald Realty Ltd. on the West 38th Avenue, said mainland Chinese buyers had been “one of the major forces driving the Westside property market over the past few years.
“Recently the Chinese government has been diligently attempting to limit the flight of capital out of [its] country. So the higher-priced Vancouver West Side markets have been experiencing a downturn in activity as a result.”
Is densifying industrial sites practical? Is densifying only appropriate on underused sites, such as truck stops and lots? And is Seattle becoming the new Vancouver? Business in Vancouver’s Peter Mitham reports.
Densification of industrial land use regularly surfaces in Vancouver only to be deemed impractical, given an array of factors ranging from the kinds of uses that occupy industrial land to geotechnical concerns. While some jurisdictions have multi-storey industrial properties, the large-bay, high-ceiling structures typical of newer industrial structures can’t really be layered on top of one another.
Point taken, some critics counter, but how about underused sites?
During recent conversations around Abbotsford’s plans to seek new exclusions from the Agricultural Land Reserve, farmland advocates pointed to the lack of industrial development on the majority of sites Abbotsford won in 2005.
Storage and truck parking may be a legitimate use, but critics argue it doesn’t create the kinds of jobs the city says it wants industrial land to support.
This is where projects such as PC Urban Properties Corp.’s plan for 265,000 square feet of next-generation industrial space at 11111 Twigg Place on Mitchell Island set an example. The project densifies a former disposal site for Western Canada Steel Ltd., which had its plant on an adjacent parcel. Spaces in the strata-titled project are between 3,640 and 12,500 square feet in two buildings, allowing companies to secure premises in the tight Vancouver industrial market.
So it was that as this visitor exited a trail in Snohomish County, Washington, last week, a couple of other hikers began chatting about how Seattle is the new Vancouver. Debates about foreign ownership, especially the alleged role Chinese buyers have played in snapping up houses and apartments and leaving them empty, were much on their minds. The issue has come to the fore since B.C. increased its property transfer tax on foreign purchases of Metro Vancouver residential properties in August 2016 and has become an issue in Seattle’s civic election campaign.
Seattle mayoral candidate Cary Moon supports a tax similar to what B.C. approved in Metro Vancouver, and at least one Seattle councillor is seeking information regarding the number of vacant homes in the city.
More apartments sold in the Fraser Valley during June than any other month on record. Prices of attached homes are rising steadily as well, widening the gap between multi-family and single-family sales.
Fraser Valley Real Estate Board transactions broke another record in June as realtors sold the most apartments ever in a one-month period.
In 30 days, 683 transactions were completed, representing 27% of all sales activity. This was an increase of 13.1% compared with apartment sales in June of last year and 12.2% compared with May 2017.
The record-breaking month was led by Surrey, where 345 apartments were sold, followed by Abbotsford (149) and Langley (121).
July followed a similar trend, as 544 apartments sold, representing the 12th consecutive month attached sales have outpaced detached sales in the region. Jeffrey Anderson, CEO of Surrey real estate company Exceeds Inc., said the price gap between types of homes has widened substantially across the Lower Mainland. He noted the price of detached homes is pushing more buyers to seek alternative property types.
“There’s such a disconnect between single-family and multi-family,” Anderson said. “So basically people are saying, ‘Well, I can’t afford single-family anymore, so now I have to look at multi-family.’ And then you have all these townhouses and multi-family developments popping up everywhere.”
Anderson said it’s likely that within the next 18 months, there will be a “soft correction” of prices across the Lower Mainland, due to multi-family developments scheduled to hit the market all over the region.
The benchmark price for a detached home within the Fraser Valley Real Estate Board’s (FVREB) jurisdiction is $966,000. This is a 3.4% increase compared with June 2017, and a 10% increase compared with July of last year. Within the Real Estate Board of Greater Vancouver’s (REBGV) jurisdiction, the benchmark price for a detached home is $1,612,400. This is a 1.9% increase from July of last year and a 1.5% increase compared with June.
FVREB president Gopal Sahota said apartments south of the Fraser River are still offering a way to get into the housing market. The benchmark price for an apartment or condo in the region is $341,100.
“Compared to Vancouver, it is quite affordable,” he said.
Commercial real estate developments in the region’s Royal City are booming, poising the city for a major rejuvenation.
Three years after it was sold by the city to a group of investors led by Vancouver’s Joe Segal and Suki Sekhorn, the eight-storey Anvil Centre office tower in downtown New Westminster has its first tenant, an indication of the growing – and quirky – commercial real estate sector in Metro Vancouver’s nexus city.
The Anvil will become a gambling destination, the old Keg restaurant on Columbia Street is being retrofitted into a Tex-Mex style eatery and “Canada’s largest indoor trampoline park” has opened in an industrial site near the SkyTrain Baird Station.
Evolution Gaming is taking one floor of the tower to house a 16,000-square-foot studio that will eventually create 170 jobs, confirmed Roger Leggett, vice-president at Cushman & Wakefield, the leasing agency.
When it launches through the B.C. Lottery Corporation playnow.com site, the operation will offer 10 live tables for blackjack, two types of baccarat and two types of roulette, Players will be able to see dealers via live streaming. Evolution’s other studios are in Amsterdam, London, Estonia, Latvia, Romania, Italy, Spain, Malta and Belgium.
Leggett said Cushman & Wakefield is on the verge of getting some other leases “over the goal line” that would take up a significant portion of the rest of the Anvil space.
Meanwhile, clothing giant Aritzia has leased more than 223,000 square feet of industrial space at the Queensborough Logistics Park, one of the largest leasing deals in the region this year, while Wesgroup is eyeing another 200,000 square feet of office space at its Brewery District development.
Directly across the Royal Columbian Hospital, which is undergoing a massive expansion, the Brewery District is nine-acres next to the Sapperton SkyTrain station and one of the most successful mixed-use developments in Metro Vancouver.
Virtually all of its 560,000 square feet of office space was snapped up quickly. TransLink signed a 20-year lease on 261,000 square feet for its eight-storey headquarters, and a number of doctors and other medical professionals bought office space for $468 to $685 per square foot. A third office building was sold to the Health Science Association. Currently, Wesgroup is completing a residential tower on the site, with a mix of rental and strata apartments, and a company spokesman confirmed a new office tower is planned.
In the first half of this year in New Westminster, total commercial building permits was $6 million, compared to $64.8 million in residential permits and $11.5 million in institutional and government building permit values.