Wency Leung
Sun
The cost of land in downtown Vancouver has jumped, in some cases as much as 350 per cent, over the past three to four years, contributing to the rising cost of housing as demand far outstrips supply, according to the president of the Urban Development Institute.
Ward McAllister, who is also president and CEO of real estate development firm Ledingham McAllister, said some residential developers are now paying at least $110 to $120 per square foot for buildable land in city, compared with about $35 per square foot four years ago.
“Land prices have gone up everywhere,” McAllister said, adding that land for highrises in Richmond has increased in value by 80 per cent during the last three years, while land costs in areas like Langley and Surrey have shot up about 70 per cent.
“We have a real shortage of land in the Lower Mainland,” he said.
Cameron Muir, senior analyst at the Canada Mortgage and Housing Corporation, agreed that the amount of buildable land in the region is limited by the ocean to the west, and land reserved for agricultural use to the east. The U.S. border to the south and mountains to the north further limit land for development.
“That constrains the overall geography,” Muir said.
He added that there is still land available, but the asking price is often too high for developers to build profitable projects.
According to the Real Estate Board of Greater Vancouver, the average price of all lots sold for residential development in 2003 was $246,872, whereas in 2005, the average was $324,689. Last month, the average was $590,844. Those figures are for the average of all sizes of lots sold, where there was either no existing residence on the property or where the buyer intended to demolish the structure for its land value only.
Meanwhile, the value of land for the Olympic athlete’s village in southeast False Creek hit a national record, as local development company Millennium Group bid $193 million for the 2.6-hectare site.
McAllister said existing communities will have to allow for denser developments if the region is to see sustainable growth.
“It’s incumbent upon all of us … to accept our fair share of growth,” he said.
McAllister pointed to Coal Harbour and the Concord Pacific lands along False Creek as examples of areas that have incorporated higher-density populations in their development.
Some neighbourhoods, however, have resisted growth, delaying the approval processes for new projects, he said. This, in turn, hurts affordability, he added.
While creating denser communities will help stabilize housing prices, McAllister said, it will not likely bring costs down.
“I probably don’t see land costs decreasing, but I see more supply coming on into the market to create more equilibrium,” he said.
© The Vancouver Sun 2006