Values for apartment buildings in Surrey have grown steadily over the past 10 years, a trend expected to continue with new supply of rental units generally limited to new condo projects. More affordable rental units tend to be limited to older rental stock.
This market is predominantly characterized by low-rise buildings and complexes over 20-years of age. The average sales value over the past five years in this market is just over $100,000 per unit.
With a limited stock of apartment buildings per capita relative to other municipalities such as Vancouver and New Westminster, investment activity in this market has been relatively confined to less than a dozen transactions each year. Cap rates have fallen steadily as well, to average just over 6.0% currently.
The prospects for this market are generally positive, with new supply limited to areas of residential development such as Surrey City Centre. According to CMHC, vacancy rates for apartments are approximately 3.7%; this is higher than the Metro Vancouver average, but still in healthy territory. Average rents range from $610 for bachelors, up to $982 for 3-bedroom units. CMHC estimates that there are over 29,000 condos in the Fraser Valley, of which approximately 21% are rented at rates averaging 10-20% higher than purpose built rental.
