July 12, 2010

Real Estate Development in the Lower Mainland: Where are the Green Lights?

Like Braun/Allison, Colliers Residential believe that in world that is increasingly transparent, sharing is best, so they came up with MarketShare, the first in what will be a series of reports on the local market in the Lower Mainland. It’s a summary of their findings on the present and future of the residential market that anyone in the real estate development industry can access.

I like this way of thinking, and as such, I think it makes sense to share a few highlights from the report.

1)   The good news for all of us in the real estate development world would have to be that the Vancouver market recovery as a whole has been remarkable.  CMHC’s recent press release on housing starts in the lower mainland is another testament that things aren’t looking so bad. There are a number of new projects in the works, and sales and pre-sales across the Lower Mainland have remained active. Keep your fingers crossed! We’d all like to see this continue.

2)   Improvement in BC-based purchasing power, continued migration from other provinces and overseas, and increased foreign investment will help the Lower Mainland further its recovery.

3)   As well as highlighting and providing market summaries for the various regions that make up the Lower Mainland, Colliers also designated each of these regions as green, yellow or red light areas for developers. The standouts:

• Vancouver-Downtown – The limited number of high-rise condo product downtown, means that downtown is a positive marketing opportunity, or ‘green light’ for developers. But take note, the strongest demand is for product priced under $450,000. I’m hard pressed to imagine what we can build for less than $450,000 in downtown. Micro suites are one answer that a few developers have taken a run at. We’ll need to be creative, as an industry, to make other ideas in this category possible.

• Vancouver-East – This is one of the most appealing areas for new multi-family home product – especially townhomes – and as such has been designated as a green light area. We had a great time helping ParkLane sell out at The Block, on South Main, during the worst part of the recession. Even won a Georgie Award for Marketing Campaign of the year. We love East Vancouver.

• Richmond – With the resale of high-rise condos having increased by 27 per cent and high demand for townhome product, Richmond is a green light area. But we’ve had great success with low-rise developments too. We helped Ledingham McAllister launch Saffron in this rapidly expanding city just this April.

• Burnaby/New Westminster – Strong monthly absorptions make this a green light area as well, while a limited amount of townhome supply present opportunity for this type of product. Last year, we launched Ledingham McAllister’s Memento, which is now sold out, and we’re anticipating the same success with Perspectives, launched this March, and LedMac’s coming soon development Reflections.

• South Surrey/White Rock – Again, there is a lot of unsold inventory in South Surrey/White Rock, but pricing is at peak levels due mainly to new immigrant Asian buyers, making it a green light opportunity. We love the area of Morgan Crossing and are really enjoying working with Intracorp on their Morgan Heights and Glenmore developments.

So all in all, things aren’t looking so bad. In fact, compared to some parts of North America, things are downright celebratory here.

I am thrilled to see a company compiling and offering up this kind of valuable information. Kudos to Colliers. We all need some directional assistance in this cloudy, foggy market, and anyone willing to shed some light on the situation deserves support and thanks.

For further questions, or to be added to the distribution list for future reports contact W. Scott Brown, Senior Vice President, Colliers International Residential Marketing at scott.brown@colliers.com

This entry was posted on Monday, July 12th, 2010 at 2:57 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.