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  #1661  
Old Posted Aug 14, 2020, 6:01 PM
whatnext whatnext is offline
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Originally Posted by Changing City View Post
The Saretsky Report (July 2020) on condos: "The real concern here is the massive increase in new listings for the month. New listings jumped 36% year-over-year. This was the highest number of new listings for the month of July in recent record."
One thing causing sellers to hold out is the hope that foreign students will return. I'm not sure posters realize how much of the rental market that now comprises. The Liberals amped up the amount of international students in Canada doubled from 2012 to 2019.
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  #1662  
Old Posted Aug 14, 2020, 7:46 PM
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Are you sure you don't mean 41st and Knight?
could be its somewhere on knight
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  #1663  
Old Posted Aug 14, 2020, 9:19 PM
Vin Vin is offline
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Originally Posted by Changing City View Post
The Saretsky Report (July 2020) on condos: "The real concern here is the massive increase in new listings for the month. New listings jumped 36% year-over-year. This was the highest number of new listings for the month of July in recent record."
OK, my bad. So it looks like condo investors are indeed giving up the downtown condos, but not desperate enough to tank the prices to get rid of them.

If this trend continues, that means the suburbs are doing a way better job than we are. Sad.
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  #1664  
Old Posted Aug 14, 2020, 9:44 PM
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Changing City Changing City is offline
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Originally Posted by Vin View Post
OK, my bad. So it looks like condo investors are indeed giving up the downtown condos, but not desperate enough to tank the prices to get rid of them.

If this trend continues, that means the suburbs are doing a way better job than we are. Sad.
I think that price changes follow the buildup of supply and falling demand, (a lagging indicator) so we'll see if prices drop in the fall and winter (assuming listings continue to pile up). Monitoring some of the apartments coming onto the market Downtown, there seem to be two approaches. Most listings are still at, or above $1,000 per square foot, and usually at, or a little above the assessed value. There are others significantly discounted - there was a 2-bed in the West End this week, just over 1,000 sq. ft,. with as assessed value over $1.1m. It was priced at $799,000. I assume they're hoping for a bidding war, but that's a serious discount if it sells at anything close to asking. The suburbs seem to be seeing a similar buildup of apartments for sale; presumably there are similar pressures on investors there. I'm sure there were student rentals there, although maybe fewer AirBnB?
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  #1665  
Old Posted Aug 14, 2020, 10:16 PM
dreambrother808 dreambrother808 is offline
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Originally Posted by whatnext View Post
One thing causing sellers to hold out is the hope that foreign students will return. I'm not sure posters realize how much of the rental market that now comprises. The Liberals amped up the amount of international students in Canada doubled from 2012 to 2019.
Isn't it odd how much rental costs rose during that time? It's almost as if there's a connection somewhere...

Foreign students are great but a government that balanced that with the needs of Canadians in the rental market would be nice.

Of course there are other factors, but there's no way this didn't have an impact. The level of unaffordability now, the limitations this places upon economic opportunities in every other area of life is not acceptable.
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  #1666  
Old Posted Aug 19, 2020, 6:08 PM
supercanuck supercanuck is offline
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Sorry if this is in the wrong place. I was just wondering where is the best place to look for house/apartment prices over the last 10 years.

For context, I'm just trying to decide if my Burquitlam purchase in 2010 "made sense", i.e. what would have happened if I bought an apartment in Coquitlam Centre instead.

Thanks for any suggestions.
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  #1667  
Old Posted Aug 19, 2020, 6:55 PM
svlt svlt is online now
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Hasn't Burquitlam skyrocketed in the past 10 years? I'd be hard pressed to find anything that didn't do well in Metro Van. I'd love to see someone have that data compiled to share as well. Maybe most insightful would be a relative % of increase.
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  #1668  
Old Posted Aug 19, 2020, 7:39 PM
chowhou chowhou is offline
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Originally Posted by supercanuck View Post
For context, I'm just trying to decide if my Burquitlam purchase in 2010 "made sense", i.e. what would have happened if I bought an apartment in Coquitlam Centre instead.
If you made a purchase anywhere in Metro Van 10 years ago, it didn't "make sense" at the time but you've surely beaten the stock market many times over so I wouldn't be concerned about being in a neighbourhood 5% or something behind another.

Burquitlam is nice.
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  #1669  
Old Posted Aug 21, 2020, 6:08 AM
officedweller officedweller is offline
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... this sort of highlights what's wrong with condo pricing within the City of Vancouver...

Flow of money from builders for community amenities in Vancouver dries up
FRANCES BULA VANCOUVER
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED 3 DAYS AGO
https://www.theglobeandmail.com/cana...ncouver-dries/
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  #1670  
Old Posted Aug 21, 2020, 4:12 PM
rofina rofina is offline
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Originally Posted by officedweller View Post
... this sort of highlights what's wrong with condo pricing within the City of Vancouver...

Flow of money from builders for community amenities in Vancouver dries up
FRANCES BULA VANCOUVER
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED 3 DAYS AGO
https://www.theglobeandmail.com/cana...ncouver-dries/

I been screaming this from the roofs for a decade.

If you want affordable housing in high density form it will never arrive, its impossible mathematically.

Case in point;

Quote:
The last major project with an agreed-upon community-amenity contribution, a condo tower in Coal Harbour, had its CAC set at $325 a square foot at the end of 2018. Another one near BC Place stadium was set at $315 in that pre-2019 period.
Lets take the lower amount of $315 a square foot for just the CAC.

Average 530sq/ft unit thats a cost of $166,950.
Lets assume this isnt luxury and developer manages to build for $450 a foot at cost to him. That's $238,500.

In fairyland where the developer has no profit to make, land is free, marketing is free, legal is free, financing is free a 530 sq/ft condo downtown has a guaranteed built on cost of $405,450.

How do you ever expect to see affordability from high rise units if that's reality?

Now imagine a more liveable size unit 1000sq/ft. That's $800,000 of costs guaranteed.
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  #1671  
Old Posted Aug 21, 2020, 4:53 PM
WarrenC12 WarrenC12 is offline
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Originally Posted by rofina View Post
I been screaming this from the roofs for a decade.

If you want affordable housing in high density form it will never arrive, its impossible mathematically.

Case in point;



Lets take the lower amount of $315 a square foot for just the CAC.

Average 530sq/ft unit thats a cost of $166,950.
Lets assume this isnt luxury and developer manages to build for $450 a foot at cost to him. That's $238,500.

In fairyland where the developer has no profit to make, land is free, marketing is free, legal is free, financing is free a 530 sq/ft condo downtown has a guaranteed built on cost of $405,450.

How do you ever expect to see affordability from high rise units if that's reality?

Now imagine a more liveable size unit 1000sq/ft. That's $800,000 of costs guaranteed.
I thought CAC was only for market condos, not rentals or more affordable housing?

$800/sf sounds like a lot until you see what CH condos sell for.
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  #1673  
Old Posted Aug 21, 2020, 5:12 PM
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Changing City Changing City is offline
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Quote:
Originally Posted by rofina View Post
I been screaming this from the roofs for a decade.

If you want affordable housing in high density form it will never arrive, its impossible mathematically.

Case in point;

Lets take the lower amount of $315 a square foot for just the CAC.

Average 530sq/ft unit thats a cost of $166,950.
Lets assume this isnt luxury and developer manages to build for $450 a foot at cost to him. That's $238,500.

In fairyland where the developer has no profit to make, land is free, marketing is free, legal is free, financing is free a 530 sq/ft condo downtown has a guaranteed built on cost of $405,450.

How do you ever expect to see affordability from high rise units if that's reality?

Now imagine a more liveable size unit 1000sq/ft. That's $800,000 of costs guaranteed.
This is a circular argument that's being expressed here for years. Why would you expect new, high rise market buildings to generate affordability?

The number of new apartments added each year is only a tiny proportion of the total number of owned apartments, and less than the total number of existing apartments sold in any year. Average prices of existing sales in the market in Downtown Vancouver are upwards of $600 per square foot. Some achieve over $3,000 per square foot. Here's a comprehensive study from last year. The average is around $1,000 per square foot. That's existing apartments - new apartments usually sell at a premium, often a significant premium.

The anticipated selling price of a new development is what generates the CAC in a rezoning. (If a development is built to zoning there is no CAC). You're looking at an example where the CAC was over $300 per square foot - that's unusual. Most are less than that; if a CAC is as high as that, either the developer is adding a huge amount of valuable space to an existing zone, or they're going to sell at a price substantially higher than the land value suggests. The CAC only relates to around 75% of the lift in land value that the rezoning would add - not the total profit a developer will make.

You seem to suggest that a developer who doesn't pay the CAC would charge less than the $1,000 per square foot that the market is already achieving for existing apartments. I don't believe that for a minute; they'd just make a bigger profit. If you got rid of rezoning, and CACs, all that you'd see is an even greater shortage of childcare spaces and affordable housing, and even wealthier property developers. You wouldn't necessarily see any more housing, because the developers are already building pretty much as much housing as the construction industry can build.

With lower and lower interest rates, there's no reason for house prices to fall unless there's a financial recession. If the price of housing (all housing - not just new housing) falls, then CAC calculations will be lower. Land values ought to fall as well. That hasn't started to happen yet. Look at Concord paying $500 per square foot of buildable for the St Paul's site. Those condos aren't going to be less than $1,000 per square foot even if they build strictly to zoning and pay zero CACs.
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  #1674  
Old Posted Aug 21, 2020, 5:14 PM
GenWhy? GenWhy? is offline
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Or, if my Client's didn't pay CACs you'd be giving them an extra wad of cash in their pocket if the market rate for condos remained. If the market says X dollars for 1-bed that's what I'll have our marketing folks list it as. They if a person re-sells then it's up to them (the market).

EDIT: What Changing said.
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  #1675  
Old Posted Aug 21, 2020, 6:00 PM
whatnext whatnext is offline
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But CACs don't apply to rental porgram builds, right?
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  #1676  
Old Posted Aug 21, 2020, 6:09 PM
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Originally Posted by whatnext View Post
But CACs don't apply to rental porgram builds, right?
In general, no. There's was one project in the West End that wasn't in any program - so strictly market rental, luxury tower, significant increase in density, where the City's real estate department said there was a large enough increase in land value to seek a CAC, and the developer baulked and sold the building. That's the only example I can think of. If a developer seeks to build in the City of Vancouver's Rental 100 program (for example), not only do they not pay a CAC, but they can also avoid the fixed rate DCL payment that every development project otherwise pays.
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  #1677  
Old Posted Aug 21, 2020, 9:25 PM
whatnext whatnext is offline
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Originally Posted by Changing City View Post
In general, no. There's was one project in the West End that wasn't in any program - so strictly market rental, luxury tower, significant increase in density, where the City's real estate department said there was a large enough increase in land value to seek a CAC, and the developer baulked and sold the building. That's the only example I can think of. If a developer seeks to build in the City of Vancouver's Rental 100 program (for example), not only do they not pay a CAC, but they can also avoid the fixed rate DCL payment that every development project otherwise pays.
So the smart money with a long term horizon would invest in building rental and avoid all the CACs. There's alway rental demand in Vancouver, I don't recall a time when the vacancy rate was ever above 2-3%.
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  #1678  
Old Posted Aug 21, 2020, 9:28 PM
rofina rofina is offline
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I'm not naive; I realize getting rid of $300 a foot CAC's doesn't mean the developer passes on $300 a foot discount to buyer. My issue is with the fact these ever existed to begin with and ergo guarantee hundredths of thousands of costs per unit before a project is even a twinkle in the eye of a developer.

Changing City - its most certainly not my narrative that high rise development would achieve affordability, its been the explicit message pushed in this region for two decades now. Both on discussion forums like this, and in public. This message was pushed by developers, by politicians, by experts, etc.

In fact, its always been a silly notion that created implied consent from the public to densify areas of the City without presenting a clear understanding of what its doing to housing costs and land values.
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  #1679  
Old Posted Aug 21, 2020, 9:29 PM
rofina rofina is offline
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So the smart money with a long term horizon would invest in building rental and avoid all the CACs. There's alway rental demand in Vancouver, I don't recall a time when the vacancy rate was ever above 2-3%.
The issue is smart money cant really invest in Vancouver long term - pension funds, insurance funds, etc despite having near zero vacancy in residential and commercial are largely absent from the market for the simple reason that they cannot justify the typical capital outlay required for the obscenely low cap rates present even at near zero vacancy rates.

Its a circular issue - the reason vacancy rates are low is because the response time from developers and investors is so slow.

If a US market had vacancy rates as low for as long as Vancouver does, you have dozens of developers tripping over themselves to build on spec.

That's not the case when the return is around 3% and the boards of funds turn down the projects.
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  #1680  
Old Posted Aug 21, 2020, 9:29 PM
officedweller officedweller is offline
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I think the point is that for market condos, in the event of a depressed market (as we are in now), the CACs establish a floor for cost recovery that prevents market pricing from being lowered.

Yes, developers won't voluntarily give up profits if the market is high, but the CACs appear to have the effect of shifting the breakeven point to a point where affordability is impossible (even if the developer wants to do so, or is forced to by market conditions).

By reference, I cringe at the CAC cost in Vancouver now, because my 1994 condo purchase (resale near Yaletown in a down market) was at $217 per sq ft. (the original HK buyer had paid $281 per sq ft and took a loss).

Last edited by officedweller; Aug 22, 2020 at 1:25 AM.
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