Vancouver real estate market reflects what world thinks

Saturday, December 31st, 2005

The fundamentals are all there — not just for 2006 but through 2009; few development sites downtown

Bob Rennie

If you forgot to buy real estate you are going to convince us all that it is a bubble. If you have recently purchased real estate then you are convinced that this it is not a bubble.

What we all do agree upon is that there is not an oversupply in any sector of real estate. Find me 10 great studios downtown or 10 fine west-side homes under $1.2 million on the right street or 10 of anything in any sector – all the buildings under the downtown cranes are 75-per-cent sold or sold out.

Condominiums downtown are now $1,100 plus per square foot for waterfront. It’s $1,500 plus per square foot on the old Expo site in an Arthur Erickson. Non-waterfront downtown is now just on either side of $600 per square foot. Burnaby is at $400 plus per square foot. East Vancouver saw King Edward Village sell out 388 condominiums in 2005 at a price never to be seen again under $375 per square foot.

We all have jobs. We have continued low interest rates (yes, they will swing one per cent either way). We are all faced with the benefit and burden of no oversupply. Ask any developer – there are simply no building sites available and when there is it is a frenzy.

Downtown, not just this season, not just this round, not just leading up to the Olympics. Forever. There are very few development sites available and larger sites are even fewer. I believe as locals we don’t get it. We do not understand. This is not just about what we think. This is now all about what the rest of the world thinks.

I continue to say, when we had Expo we handed out our business card to the world and they kept it. Look out. The world is watching Vancouver and the 2010 Winter Olympics is putting a very big spotlight on what I believe is an amazing place to live on this planet.

The question The Vancouver Sun actually asked me to address was, “What do you see for 2006?” The fundamentals are all there, but not just for 2006 — they are there for 2007, 2008 and 2009. Even the rental inventory that is supplied by investor buyers is being held in balance. Remember, no major landlords are building rental towers. In Greater Vancouver, the rental supply is generated by the investor buyers and with 25 per cent to 40 per cent down they are buying with real money. Unlike in the United States where the investor puts down only 5 per cent.

© The Vancouver Sun 2005

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