The week’s top stories touch on the luxury home market – which Canadian sites tops the nation’s luxury market – and the world’s? While the debate surrounding mega mansions on Agriculture Land Reserve parcels in Richmond continues. As Broadway Street is set to become home to the Millennium Line extension to Arbutus Street, land owners in the vicinity hope to cash in on rising demand for transit-accessible developments, while the City of Vancouver is taking a proactive approach to limit speculation in the area.
Here is Western Investor’s pick of the top commercial real estate stories published this week.
Greater Victoria is on top of the world when it comes to the “hottest” housing markets around the globe, according to Christie’s International Real Estate.
The company’s “luxury thermometer” for primary markets set Victoria on top, followed by San Diego and Orange County in California, Washington, D.C., and Paris.
Last year, the average time to sell a luxury property, based on a $1-million-and-over sale price, was just 32 days, Christie’s said in its new luxury housing report. That’s down from 41 days in 2016.
“Powered by an influx of buyers from the United States and China, Victoria is experiencing the same rapid growth in housing prices and sales volumes that have strengthened Toronto and Vancouver in recent years,” the report said.
It noted that the province is bringing in measures to cool the market, such as foreign buyer and speculation taxes, and is beefing up transparency rules about who is purchasing properties.
Christie’s predicts that the capital region’s market will continue to perform well despite regulations.
It’s no secret that Greater Victoria has a hot housing market.
Competition is especially stiff for single-family houses in the core municipalities.
Victoria Real Estate Board president Kyle Kerr questions Christie’s definition of luxury in this region, saying the price of a luxury home can vary depending on its location.
With a benchmark price in the core last month of $866,700, that is not far from $1 million and would not necessarily be a luxury house. He said that a luxury home is probably closer to $2 million.
With the high value of land these days, a modest house in an in-demand location could be valued at $1 million or more, he said. “We have a scarcity of land, so the land that these homes sit on will continue to appreciate.”
And although the number of days on the market has decreased for homes of $1 million and up, Kerr said that also applies to homes offered at lower prices, where sales activity is especially brisk.
Kerr also questions Christie’s statement that there has been an “influx” of American and Asian buyers. The province tracks sales to foreign buyers, which come in at between 3.9 to 5.5 per cent. “We definitely have not seen an influx.”
Size allowances for farmland residences continue to be the centre of much conversation and demand in Richmond, after the City allowed a secondary home on ALR parcels despite limited the size of the first.
Richmond council has affirmed last year’s contentious bylaw limiting farmhouses on Agricultural Land Reserve (ALR)parcels bigger than a half-acre to 10,764 square feet. Richmond doubled down and allowed a secondary dwelling of up to 3,229 square feet on the same lot.
The moves came despite city staff recommending limiting the primary residence to 5,382 square feet, in keeping with provincial guidelines. Those guidelines may well become rules in the wake of a provincial consultation on revitalizing the ALR. (Review committee chairwoman Jennifer Dyson was appointed last week to chair the Agricultural Land Commission.)
Advocates for farmland note that Richmond has 61 applications for so-called monster homes, which are less than half the size of many homes owners routinely proposed prior to last year’s bylaw.
Richmond might be the epicentre of angst over residential development within the ALR, but property transfer data points to the Fraser Valley.
B.C. charges the property transfer tax, including the special rate for foreign nationals, on the residential portion of farm properties. And 170 of such sales occurred in the Fraser Valley in 2017, versus 148 in Metro Vancouver.
Compared with the final seven months of 2016, when the former BC Liberal government began tracking property transfer data, approximately 16% fewer farm residences changed hands provincewide in the final seven months of 2017. This was consistent with the shift in the Lower Mainland.
The sharpest decline was in the North Okanagan, the only regional district besides Metro Vancouver and the Fraser Valley to see more than 100 farm residences change hands in 2016. During the final seven months of 2017, just 75 North Okanagan farm residences changed hands – 61% fewer than a year earlier.
Recreational property is a seller’s market in B.C., according to a national report from Re/Max last week. “Driven primarily by retirees” and “buyers cashing in on expensive urban housing markets,” a lack of listings has constrained sales and boosted prices.
A glance at the province’s property transfer data underscores the sentiment of Re/Max brokers surveyed for the report. B.C. recreational property sales dropped 87% in the first quarter of this year, versus the same period a year ago. In many regions there were no sales.
Provincewide, 1,241 recreational property sales occurred last year. Squamish-Lillooet Regional District, including Whistler, led the way with 244. The only other regional districts to log 100 sales were Alberni-Clayoquot, Columbia Shuswap and East Kootenay.
Gas stations across the region continue to come up for sale in favour of their residential development potential.
Gas stations in Metro Vancouver continue to face closure in favour of their redevelopment potential, with four properties currently up for sale by Colliers International.
The Esso stations are located in Vancouver’s West Side and Burnaby, at:
3205 Arbutus Street
5702 Granville Street
6525 Oak Street
3965 North Road
The properties can be purchased individually or as part of a package. The high-profile sites are all corner lots, according to urbanYVR.
The Vancouver locations offer retail and residential development potential, while the Burnaby property allows for a high-rise residential tower in close proximity to Lougheed Town Centre. The Arbutus location is just 800 metres from the future Millennium Line Broadway Extension.
The properties do not have a set asking price and information on the bid submission process is to be released at a later date.
Last year, several Chevron gas stations in Vancouver were listed and sold for redevelopment. Each one was sold for well above assessed value, with the West Georgia location aquired for $72 million by Anthem Properties.
New policy takes a proactive approach to maintain affordable housing along the future Millennium Line Broadway extension
The City of Vancouver has proposed new policy aiming to limit land speculation along the Broadway Corridor.
The new policy, called the Development Contribution Expectation (DCE), will require developers to plan projects that will support public amenities and affordable rental housing. The area has become subject to white-hot demand from developers since TransLink announced it would be extending the Millennium Line to Arbutus Street along Broadway.
“Stabilizing land values along the Broadway corridor to prioritize the retention of existing affordable rental housing is one of the priority actions in the Housing Vancouver strategy,” says Gil Kelley, general manager of planning, urban Design and sustainability for the City of Vancouver.
Council will also be considering an interim rezoning policy for the planning area that will limit rezonings, with some exceptions, while planning process of an official Broadway Corridor Plan is underway.
The prospective Broadway Plan may include opportunities for increased strata residential density. There will be no additional density of market condominiums in areas that are already protected against the loss of rental housing through the Rental Housing Stock Official Development Plan, the City states.
Under the DCE, the City will continue to prioritize work and office space along Broadway between Yukon and Oak Streets. Additional residential density will not be considered in this area.
“The future Skytrain development along Broadway is a key opportunity to continue creating more job space and affordable housing,” says Sadhu Johnston, city manager of Vancouver. “By leveraging this critical transportation investment we can ensure that the needs of our employers and residents are being met as our city continues to grow.”