Rental housing at risk of being lost: study.

A Metro Vancouver housing study is warning that thousands of older, affordable, much-needed rental housing units in the area are in danger of being removed from the market due to redevelopment pressures.

Many of the units were built more than 40 years ago under federal government tax incentive schemes – long since ended – and Metro politicians are renewing the call for the incentives to be brought back.

The City of Vancouver is embarking on a comprehensive community planning program in the Marpole neighbourhood.

The Marpole Community Plan program will take place over an 18-21 month time period starting in April 2012 and is expected to be completed in 2013.

Community Open Houses

Drop by to learn more about the community planning process and how to get involved.

Wednesday, May 2, 5 – 9 pm
Marpole-Oakridge Community Centre
990 West 59th Avenue (at Oak Street)

Saturday, May 5, 11am – 3 pm
8138 Granville Street

For further information.

Debt financing for most commercial real estate assets in Metro Vancouver is readily available as lenders continue to offer mortgage rates underpinned by historically low interest rates. Are interest rates on the rise? Many are speculating as to when a hike will occur, with most believing this will take place in late 2012 or early 2013.

The yield on 5-year GOC bonds remains below 2.0% which is supporting rates as low as 4.00% on commercial real estate debt.

Source: Bank of Canada

Values for freehold office buildings and strata office space remain stable in North Vancouver, with steady growth exhibited over the past several years, a trend expected to continue with new supply generally limited to a handful of sites.

This market is predominantly characterized by owner occupiers. The average sales value over the past five years in this market is $350 / SF. Newly built buidlings and strata space in the core areas of lower and mid-Lonsdale have achieved values approaching $500 / SF, with older product in business park or industrial areas reaching below $300 / SF.

Investment activity in this market has been relatively confined to strata sales since the acquisition of the Westmar Building (233 West 1st Avenue) by Upcountry Group in September 2009. Since the acquisition, Upcountry has strata-titled the building and rebranded it ‘The Lookout‘ with 31 units, ranging in size from 538 to 25,000 SF. Several units are still available in the building, averaging approximately $450-550 / SF.

One of the more land constrained markets in the Lower Mainland, there has not been a lot of opportunity for new multi-family residential development in West Vancouver over the past several years.

With the exception of some standing inventory in two small lowrise and townhouse projects, there are no actively selling projects. However, there are several large scale developments in various stages of planning and approval.

These include:

None of the above projects are straightforward development processes from an approvals standpoint. This combined with West Vancouver’s notoriety as a difficult municipality to deal with the public may push out the timelines that projects are delivered to market.

This dearth in new supply on the horizon is pushing sales prices well above $800 per sq ft in most locations. The lack of opportunity to live in West Vancouver on an affordable basis is likely to reinforce pricing for the foreseeable future.

Despite being a highly attractive destination for end users, many developers do not even place West Van on their radar due to the lack of opportunity and a negative perception in getting projects approved.