The week’s top stories focus on the latest statistics on Lower Mainland housing sales and prices, overall declining for the month of March. Still, Vancouver prices remain largely above the rate of affordability. Meanwhile, major retail and institutional sites up for sale in Vancouver’s downtown area have developers clamoring over potential for large-scale redevelopment.
Here is Western Investor’s pick of the most-buzzworthy commercial real estate stories published this week.
San Francisco is the only city that's even less affordable than Vancouver when comparing home prices with typical incomes.
Real estate website Zoocasa recently conducted a study of the best and worst North American cities for affordable housing and Vancouver came second worst.
The study sourced, “December 2018 median home prices for 30 major U.S. markets and five Canadian, and calculated the minimum income required to purchase in each city.”
From there, the study compared the minimum income needed to the actual median household income, and calculated the difference to determine whether there was an income surplus or an income gap.
Zoocasa noted that the benchmark home price in Vancouver is $1,156,050 CAD, and that the required income to purchase a home at that cost is $164,844 CAD. However, the actual median income in the city is $65,327 CAD, which represents an income gap of $99,517 CAD.
San Francisco was ranked as the least affordable housing market in North America. Here, the benchmark home price is $1,360,000 USD and the required income is $236,268, but the actual median income is $96,265 USD. This figure represents an income gap of $140,003 USD.
On the other end of the spectrum, Calgary had an income surplus of $40,297 CAD. The city’s benchmark home price is $400,00 CAD and the required income is $57,037 CAD, but the median income in Calgary is $97,334 CAD.
Residential transactions have plunged to just over half the 10-year average for the month, as prices slide across all property types.
Falling home sales in Metro Vancouver are “largely policy induced” and policymakers are “using policy to delay housing demand and feeding disruptive cycles,” according to the new president of the Real Estate Board of Greater Vancouver (REBGV).
Issuing its monthly market statistics April 2, the REBGV reported that there were just 1,727 home sales in March 2019, which is 31.4 per cent year over year decline, and 46.3 per cent below the 10-year average for the month.
It’s also the lowest number of March home sales since 1986.
However, the sales total is higher than one monthly previously, up 16.4 per cent from the 1,484 homes sold in February, which is typical for this time of year.
“Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced,” said Ashley Smith, the new REBGV president. “For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”
She added, “What policymakers are failing to recognize is that demand-side measures don’t eliminate demand, they sideline potential home buyers in the short term. That demand is ultimately satisfied down the line because shelter needs don’t go away. Using public policy to delay local demand in the housing market just feeds disruptive cycles that have been so well-documented in our region.”
The number of homes for sale continues to climb as sellers try to offload their properties in what is traditionally a busy spring market, while buyers hold back. There were 4,949 homes newly listed for sale on the MLS in March 2019. This is an 11.2 per cent increase from March 2018 and 27.2 per cent higher than February 2019.
The total number of homes available on Metro Vancouver’s MLS as of the end of March is 12,774, a 52.4 per cent increase compared with March 2018 and up 10.2 per cent month over month.
The overall sales-to-active listings ration for all property types is teetering between a balanced market and a buyer’s market, and currently standing at 13.5 per cent. The improvement in sales in March brought this figure back into balanced market territory, which is generally between 12 and 20 per cent.
However, the market varies greatly by property type, as the ratio is 9.4 per cent for detached homes, which is firmly a buyer’s market. It’s a balanced market for townhomes/duplexes/rowhomes at 15.9 per cent, and for condos at 17.2 per cent.
The benchmark price for all residential properties in Metro Vancouver stands at $1,011,200, which is a 7.7 per cent drop from March 2018, and a 0.5 per cent slide in the month since February 2019.
Sales and prices by property type and area
There were 529 sales of Metro Vancouver detached homes in March, which is a 26.7 per cent year over year decline, but an 18.1 per cent rise compared with February this year.
The benchmark price for a detached home in the region is $1,437,100, which is 10.5 per cent lower then March 2018, and a 0.4 per cent decrease from February 2019.
Historic building has landed on several Heritage Vancouver Society watch lists.
The St. Paul’s Hospital 6.6-acre site on Burrard Street in downtown Vancouver is up for sale now that plans are moving forward for the replacement health care facility on False Creek Flats.
News of the sale was first reported in a John Mackie story in the Vancouver Sun April 2.
Proceeds will help cover costs for the new $1.9-billion St. Paul’s Hospital on Station Street, which is expected to be completed by 2026.
CBRE Limited, which listed the Burrard Street property, calls it a “once-in-a-generation downtown development opportunity.”
“Situated at the highest point in the downtown core, this expansive site holds the immense potential to become a ‘city within a city' including the next series of signature mixed-use towers that will shape the skyline of Vancouver and direct the future of the downtown core,” the sales brochure states.
Shaf Hussain, a spokesman for Providence Health Care (PHC), said he believes the site went to market soon after the Feb. 15 announcement revealing that the new St. Paul's Hospital was officially moving forward. He said a "unique part of this project" is that the sale proceeds will be PHC money since it owns the land, so "the cost to the taxpayer is minimized." He noted that the provincial government stated on Feb. 15 that its contribution will be $990 million.
Building height on the Burrard Street property is determined by the zoning and development bylaw, Downtown Official Development Plan (ODP) and city-adopted view cones.
“The maximum height permitted within the ODP is 300 feet, and allows an increased height up to 450 feet to be considered on a discretionary basis. The West End Plan allows maximum heights up to 550 feet to be considered for rezoning applications,” Karen Hoese, the City of Vancouver assistant director of the rezoning centre, stated in an email to the Vancouver Courier. “However, the maximum height on most of the site (except the Burrard/Comox corner) is limited to approximately 180 to 200 feet by view corridors.”
Meanwhile, under zoning, the maximum density that could be achieved is up to 6 floor space ratio (+10 per cent heritage density).
“However, on any site, the maximum density cannot always be achieved due to site specific constraints, urban design objectives, on site open space and impact on traffic and other infrastructure,” Hoese explained
Vancouver's International Village mall listed for sale as part of larger retail portfolio – Western Investor
The mall is one of three properties being marketed for sale by CBRE for an undisclosed price.
Vancouver’s International Village mall has been listed for sale as part of a trio of retail properties, for an undisclosed price.
CBRE’s Urban Properties Group is presently marketing The Henderson Retail Portfolio, an opportunity to acquire the mall, nearby Paris Square, and Coquitlam’s Henderson Place mall.
The portfolio includes over 11 acres of land and over 400,000 square feet of leasable retail space.
International Village malls, previously known as Tinseltown, is best know its anchor tenant, Cineplex Odean Cinemas. The mall offers over 195,000 square feet of retail space, occupied mostly by independent retailers, a Starbucks and Rexall pharmacy.
The 3.38-acre site also offers potential for redevelopment straddling Vancouver’s Stadium District and Chinatown.
“International Village’s vast retail space and superb location is remarkably under-utilized in its current form. Investors are offered the opportunity to dramatically increase International Village’s visitation and revenue by implementing a new space planning and tenant positioning strategy,” reads the listing from CBRE.
Across from the mall is the portfolio’s 80,000-square-foot “Paris Square,” the roundabout property anchored by T&T Supermarket. The square has stair access to the Expo Line’s Stadium-Chinatown SkyTrain station.
The third property included in the portfolio is the nearly 143,000-sqaure-foot Henderson Place Mall, located on 6.18 acres of land in Coquitlam. The site’s proximity to the new Lincoln Station stop on the Evergreen Extension makes it ripe for redevelopment to capitalize on the area’s growing densification.