Metro Vancouver municipalities recently have approved community plans allowing for increased density, a situation that’s keeping bulldozers busy and developers happy.
A spring 2014 report by Colliers International released Thursday says: “The land market in Metro Vancouver continues on its upward trajectory, with developers continuing to be bullish on the market.”
The Landshare report, one of Colliers’s regular reports on regional trends in the land market, says Vancouver’s West End is poised to become an especially active area for development.
“The West End is expected to see a second coming in development in an area that has been relatively untouched since the 1970s,” Colliers’ market intelligence manager James Lang says.
At least 15 high-density residential developments are now in the approval process, and the 1400 block of Alberni Street has been purchased for development.
The report reveals 2014 has seen “a surge in the completion of large-scale (property) transactions.”
And if there’s a bubble in the residential property market as some allege, developers aren’t paying heed.
“Areas that were expected to crest such as Metrotown and the west side of Vancouver have continued their upward pricing trend,” Colliers says.
“High-density site transactions far exceeded 2012 land sales as landowners began to cash out.”
Action is particularly hot on the rental side of the residential real estate market, suggesting Vancouver’s council has been successful in its bid to boost rental housing stock.
The Vision council in 2012 set a goal of creating 3,350 new rental units by 2021, of which 3,300 units — spread across 34 projects — are now in the planning stages.
To entice developers, Vancouver offered to speed permits and lower development costs and community amenity contributions. The city also awarded density bonuses, relaxed parking requirements and permitted units as small as 320 square feet.
This has resulted in a high return on investment for developers for rental units.
Commercially, in the downtown area, a large resort development southwest of BC Place — accommodating two hotel towers, a conference centre, retail space and the Edgewater Casino — is now the subject of a development proposal.
The report notes land values just keep on climbing on Vancouver’s tony west side “as end-user and investor demand remains strong.”
The west side will see a large Oakridge Mall redevelopment with plenty of high density construction nearby.
With a declining stock of developable land on the west side and along the Cambie corridor, there’s always Marpole to keep developers engaged.
The east side of the city too, around Kingsway, Central Park and Mount Pleasant, is “seeing a surge in end-user demand which is driving up the land market in these areas.” No doubt many of the buyers are Vancouverites priced out of west-side properties.
But it is Burnaby that is “one of the most demanded municipalities in the land market,” the report says, referring to “an unprecedented development appetite over the last year.”
Meanwhile, Richmond “may be in line for a quieter 2014,” although the report cites a new luxury mall to be built near the airport, on Sea Island, which could well become “a major economic driver in the north Richmond area.”
In Surrey, first-time home buyers and down-sizers are driving the demand but land values have remained on par with last fall.
Evidence clearly suggests municipal density policies are paying off for developers, and perhaps limiting further expansion of far-flung suburbs.
But the real question for Vancouverites is this: are all those new condo towers, megamalls and densified neighbourhoods making the region more livable?
----- Barbara Yaffe
sources: Vancouver Sun