Peerage Partners, Real Estate News
Market Intelligence, Real Estate News
THE FIFTH DIMENSION 2021 FALL EDITION
Suburban based Fifth Avenue Real Estate Marketing Limited and Vancouver based BakerWest Real Estate Incorporated are both full service residential real estate sales and project marketing organizations. Each of these organizations are part of the ecosystem of premium real estate services companies operating throughout North America. In BC, this includes Sotheby’s International Realty Canada and Okanagan based EPIC Real Estate Solutions Incorporated.
In partnership with BakerWest, we are pleased to present this Fall edition of The Fifth Dimension. Our theme is “There Has Only Been One Summer Like This One”. Record setting temperatures were mirrored in the new and re-sale markets for multifamily homes throughout Metro Vancouver. Quite the summer blockbuster for our industry, all while the global pandemic presses on.
Recently in my capacity supporting our Okanagan leading firm, EPIC Real Estate Solutions, I was asked to share a market update with the membership of the Okanagan Chapter of the Urban Development Institute (UDI). We create a similar report to The Fifth Dimension for that region and my talk centred around the release of the latest edition of that report branded On The Mark.
The theme of this talk inspired the theme for this edition of The Fifth Dimension, “There Has Only Been One Summer Like This One”. Coming out of the more intense COVID-19 lockdown last year an unprecedented 500+ sales, new multifamily sales were generated in the fall/winter market and nearly 2.5 times that were sold in the spring/summer of 2021. Including Lake Country, that number is nearly 3 times that. The Greater Kelowna Region and Lake Country also had a total of 1,011 sales of newer multifamily resale homes as well, between the beginning of Quarter Two 2021 and the end of Quarter Three 2021. This is up 11 percent when compared to sales observed between the previous six months.
In the prior edition, we projected 750 to 1,000 units of concrete to be absorbed this year at an average pricing over $800 per square foot. The absorptions that occurred were similar to what you will read in this report about Surrey City Centre (despite a smaller population) and the prices were over $100 more than projected or again in line with Surrey City Centre. Like in Metro Vancouver, where little to no standing inventory exists, as larger inventory neared completion, the end user was more active than in 2020. In 2020, the primary offerings being marketed in the region were still presale. Accelerated interest was experienced from outside the region. This is typically from the Lower Mainland but in this anomalous summer, the demand came from as far east as Ontario. Clearly, personal circumstances/lifestyle choices will continue to impact the growth of the Okanagan Region making this market more and more attractive to developers from Metro Vancouver.
From the High Rise perspective, 635 total new High Rise sales were observed. This figure has swelled by 392 percent when compared to the 129 sales observed in the prior period. The significant growth for this segment is driven by successful presale campaigns for Water Street by the Park Eli, Aqua, and Movala. Standing inventory is relatively non-existent in this segment.
The Low Rise segment saw 482 sales which roughly accounted for 36 percent of observed presales in the Greater Kelowna Region. This figure has more than doubled from our previous update. Successful presale campaigns including Abode, Caban, and Lakeview Village, accounted for 58 percent of the sales. Notable projects within this segment that sold include Sole Rutland and Cawston. Prices appreciated rapidly and this appreciation has been recognized in Lake Country and West Kelowna. Downtown woodframe with smaller units are now $735+ per square foot. Again, similar to Surrey City but in a City with a population 1/3 the size.
207 Townhome sales were observed to be sold in the spring/summer. This figure represents the most modest growth for any segment with a nine percent increase from the 190 homes observed to be sold in the fall/winter. Similar to the Fraser Valley markets in terms of price escalation and absorptions, this product type is the most undersupplied in the region.
The story of “There Has Only Been One Summer Like This One” extended to Vancouver Island as well. Typically the Victoria market for new multifamily homes is similar to the Okanagan region with one exception. It has proven more challenging to generate accelerated presale absorptions during the initial month of sales (Read: good market but takes longer to sell). That was not the case this summer as evidenced by a bestseller at an award-winning community in Langford that generated a near 80 unit sell out in a month at prices over $600 blended price per square. Also, the record breaking 100+ sales in the first ten days at the first new High Rise offering released at Bear Mountain in nearly two decades. Clearly there has never been a summer like this one in the Okanagan and throughout BC.
Closer to home, this theme rings true.
For the first time ever, over 5,000 new multifamily homes sold in Metro Vancouver in the Summer of 2021. This is an 82 percent increase from the same time last year. This brought the year to date total to a number higher than 10 of the last 12 years total annual figure. High Rise absorptions represented 53 percent of these sales and roughly a third of these occurred in Surrey.
Buyers remained active practically each and every day with an unprecedented attention to launches despite holidays and long weekends.
Typically our teams at Fifth Avenue and BakerWest catch our breath during the summer. Not in the “There Only Has Been One Summer Like This One” summer. I suppose we can rest in December. Perhaps.