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Vancouver real estate site sells at $95 million per acre; an acre in the suburbs ranges up to $27 million – and the eye-popping prices will be passed on to new home buyers and renters.
Bowling Alley Site in Burnaby Sells for Over $22 Million per Acre, Reflecting Developer Confidence in Home Buyers and Renters’ Ability to Handle Increased Costs. Metro Vancouver Municipalities and the Region Raise Development Cost Charges by Up to 46% in Response to the Expensive Housing Market.
Residential Land Prices Reach Dizzying Heights: Vancouver’s 0.20-Acre Lot Trades for $19 Million, Equivalent to $95 Million per Acre.
Wall Financial Corp Seizes the Opportunity, Acquiring the Property with Plans to Develop a Towering 32-Storey Rental Building, as Revealed by Mark Goodman of Goodman Commercial Inc., the Deal Broker.
In Another Remarkable Transaction, Marcon Development Corp. Snaps Up a 0.76-Acre Land Assembly Site in Surrey’s City Centre for $21 Million, Valued at $27 Million per Acre. The Site Is Greenlit for Mixed-Use Residential Towers at a Generous Floor-Space Ratio of 9 FSR.
The Sale Concludes at the Full Asking Price, Demonstrating the Strong Demand.
“The competition was fierce,” revealed Stanley Chiu, a representative from Gammon International Real Estate in Vancouver, commenting on the sale.
Adding to the spree, Keltic Canada Development recently splurged a whopping $94 million to acquire the 4.2-acre expanse of Brentwood Bowling Lanes in Burnaby. Their ambitious vision entails erecting two to three residential towers within the upcoming years.
Continuing the momentum from 2022, the first quarter of 2023 witnessed a steady stream of substantial multimillion-dollar residential land assemblies. These transactions, along with various smaller deals, contributed to a total land sales value of $7.3 billion reported by the Commercial Edge of the Real Estate Board of Greater Vancouver. Although this figure encompassed industrial and commercial properties, residential investments dominated the market.
Last year, land sales outshined all other commercial transactions in the Lower Mainland, as indicated by the real estate board.
At the April Vancouver Real Estate Forum, residential developers estimated that the cost of delivering a basic apartment unit in Metro Vancouver exceeds $600,000 per unit, even before factoring in land expenses. This steep expense is primarily attributed to the escalating input costs in the region.
As developers fiercely compete, shelling out millions above property assessments to secure land, there’s another upward trend in the realm of development cost charges (DCCs) for residential projects.
The City of Richmond has witnessed a substantial 47% increase in DCCs, while Coquitlam has raised theirs by 33%. In the city of Vancouver, the DCCs alone for a new 1,000-square-foot apartment now amount to a hefty $32,000.
Adding to the mix, Metro Vancouver’s board passed a resolution on April 19, mandating developers to shoulder 99% of the future costs associated with water and sewage infrastructure, starting from the following year.
Dana Westermark, a developer from Richmond, aptly stated the obvious: the escalating costs of land and development charges will inevitably translate into significantly higher prices for both homeowners and renters.
“It directly impacts the final price of all housing,” expressed Westermark to Glacier Media. “It’s unrealistic to assume that developers will absorb these costs without passing them on to consumers.”
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Market Intelligence, Real Estate News