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Transit & Foreign Buyers Top Metro’s Property Topics


Under Real Estate

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December 29th, 2016

Evergreen opening

Seven years ago, people formed long queues to be among the first to ride the Canada Line between Vancouver and Richmond. The project completed with enthusiasm for the coming Olympics. The development of sites along the line in anticipation of its completion warranted a mention, too.

A quieter buzz attended completion of the Evergreen Extension, perhaps muffled by the season’s first snowflakes.

But development, and demand, have proceeded apace in the Tri-Cities area with the opening of the new rapid transit line between Lougheed Town Centre in Burnaby and Coquitlam.

“When the Evergreen Extension was announced a few years ago, we saw an influx of interest along the SkyTrain line, and it has remained strong ever since,” said Cameron McNeill, president of MLA Canada (the parent of the recently merged real estate marketing firms MAC Marketing Solutions and BLVD Marketing Group). “In recent months TransLink has ramped up its marketing and promotions, and with the completion it has helped to draw greater attention to the communities around the rapid transit system.”

McNeill said traffic through the firm’s presentation centres adjacent to the Evergreen Extension has increased with the line’s opening, though the latest Fifth Avenue Real Estate Marketing Ltd. market review suggests there’s not much to be had.

“Highrise product located within close proximity to the line continued to be absorbed,” remarked the report, released shortly before the line opened. “Only 22 units remain unsold at the end of the third quarter.”

A similar number of low-rise homes remained available, while just nine townhomes had yet to sell.

Pre-sales at Otivo Development Group’s 64-unit project Simon in west Coquitlam, which launched in October, have been similarly swift. The project is now more than half sold.

Foreign-buyer data

Strong sales in the Tri-Cities might lead one to ask just who is buying those units.

One might think that since August 2, when the province slapped an additional 15% property transfer tax on foreign purchases of residential real estate in Metro Vancouver, those buyers would be entirely domestic.

However, the latest stats from Victoria indicate that foreign participation in Vancouver’s residential market increased to 3% in October, up from 0.9% in August.

While this is a shift from the participation rate of 13.2% reported in June and July, it hews closely to the 2.2% foreign ownership rate Canada Mortgage and Housing Corp. reported among highrise condos at the end of November.

Simply put, most observers concede that the tax is being taken in stride, with minimal impact on condo sales and no impact on interest.

Nor has there been a flight to surrounding municipalities, as some predicted.

Whistler and Squamish both had above-average years in 2016, but foreign buyers haven’t been a significant factor.

Lisa Bjornson, managing broker of Royal LePage Black Tusk Realty in Squamish, said foreign buyers typically represent about 3% to 4% of local sales. Activity is typically driven by those looking to escape Vancouver, either for lifestyle reasons or in search of cheaper property.

Upgrades to the Sea-to-Sky Highway have facilitated the movement, bringing a more stable group of residents than in the early 1990s, the last time an uptick in house prices sent Vancouverites looking for cheaper housing elsewhere.

But when the province clamped down on foreign buyers, it cooled sales in Squamish.

“We were seeing people cash out and bring their money to Squamish,” she said. “The foreign buyers weren’t buying here; we were getting the trickle-down. When the foreign buyers stopped buying, we stopped getting the trickle-down.”

This isn’t necessarily a bad thing, either, after two years of frenzied activity.

“We’re seeing a more traditional pattern,” she said. “We’re seeing a market come back to balance.”

2016 Year in Review : Transit & Foreign Buyers Top Metro’s Property Topics by Peter Mitham | Business in Vancouver

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