rebound_1a.jpg

The heated B.C. real estate market is back with a vengeance, but not all neighbourhoods are created equal. We’ve got the five “hot pockets” to watch for – and invest in – in 2010.

What goes down in B.C. real estate must, apparently, come up. And quickly: by the end of 2009, the average home price in the province had risen to $463,000, back to where it was in 2007. Interest rates are, at least for now, at record lows, and increasing consumer confidence has spurred the market’s recovery beyond expectations. Barring the usual unforeseeable mayhem, things are looking good.

But speak with any number of real estate experts and you are sure to get entirely divergent assessments on the state of the market. Nothing is clear-cut or set in stone in this industry. When selecting neighbourhoods to feature as “up-and-coming,” therefore, one must do so with caution: consensus does not equal accuracy, nor can the analysis of any amount of data guarantee that one region will outperform another. Still, supply and demand go hand in hand, and where the people go, increased desirability and value follow.

B.C.’s population grew from four million to 4.5 million between 1999 and 2009 and is expected to reach five million by 2019. In this year’s real estate roundup, we look at particular regions of the province that have been experiencing steady population growth or that have a history of underdevelopment and the capacity to grow. In consultation with a variety of experts from across B.C. – in development, sales and urban planning – we’ve picked five “hot pockets,” based on either current levels of construction or near-term development potential. For each neighbourhood, we’ve identified a project that embodies that potential and asked the developer and marketer to answer the question, Why here? Finally, we’ve asked the city planners and politicians responsible for those areas to explain what their vision is for the neighbourhood.

[pagebreak]

On the Rebound

Vancouver’s Chinatown

 
Access to the SkyTrain, Gastown and Yaletown, an increasing number of trendy eateries and boutiques (think Campagnolo restaurant and Bob Rennie’s new art gallery) and lower land prices than its western counterparts situate Chinatown to emerge as downtown’s next big thing. The city’s bilingual ad campaign, designed to make Chinatown’s retailers more accessible to English speakers, has helped bridge the gap between the neighbourhood’s shopkeepers, tourists and lost and curious locals alike, and the continuation of its Heritage Building Rehabilitation Program is expected to bring an additional $531 million in public and private investment into the area. Chinatown has an older populace – 25 per cent of residents are over 65 years old, compared to the Vancouver average of 13 per cent – but it also nearly doubled in size between 2001 and 2006, with most of those new residents falling between the ages of 20 and 44. Chinatown’s current state of underdevelopment is both a blessing and a curse: many properties are underutilized and storefronts often lie vacant, but it has room to double its population even without rezoning.
 

The Project

Ginger, 718 Main St., Vancouver.
78 condo units, priced from $329,000

The Developer

David Porte, president, Porte Development Corp.: “Our project is part of the beginning. Chinatown is on the cusp of change. Young people in their 20s, artists, musicians and graphic designers are attracted by the transition. It’s always been a commercially vibrant place, but there had been little residential development. I am excited to see it two years from now, when hundreds of new residents step out of their apartments and make Chinatown both a daytime and nighttime neighbourhood.”

The Marketer

Kellie Lawson, sales and marketing consultant, Porte Development Corp.: “There wasn’t a market here five years ago, but now Chinatown is the next big thing waiting to be discovered. It has all the right ingredients; I saw it 15 years ago in Yaletown. It’s a five-minute walk to Gastown, a five-minute walk to the seawall; there are green grocers, restaurants and shops. I think it’s the best value real estate in downtown Vancouver.”

The Visionary

Jessica Chen, senior planner, City of Vancouver: “This is not a gentrification. All of our Chinatown initiatives are based on building upon the neighbourhood’s existing assets: preserving the traditional typology and scale of Chinatown’s buildings and the area’s distinct cultural feel. Already we are starting to see younger professionals, attracted by the location, building on the existing population and broadening its relevance to Vancouver as a whole.

[pagebreak]

On the Rebound

Surrey City Central

 
By 2020 Surrey is anticipated to surpass Vancouver as the largest municipality in Metro Vancouver. To provide this growing population – roughly a third of whom are under the age of 19 – with the education, employment and services they will need, the city began moving ahead in 2006 on the first two stages of a three-stage development plan. The plan, founded in 1991, divides the region into economic development zones, creating property-tax-free zones for business-related developments and reducing building permit fees by 50 per cent for projects worth more than $10 million in construction value. The linchpin of the plan has been development of a city core in Whalley, known as City Central. Despite the innovative plan and relatively cheap land prices, progress at City Central has been slow to date, especially after the economic downturn. But with 54 building applications remaining on the books, SFU’s increasingly popular Surrey campus, a Bing Thom-designed library set to open in the summer of 2011 and the relocation of city hall by 2013, signs abound of City Central’s continuing emergence.


The Project

Quattro, 13733 170A Ave., Surrey.
Four four-storey buildings containing 472 condo units and 19,600 square feet of commercial space. First phase completed March 2009; second phase to be completed this month. Priced from $119,000

The Developer

Charan Sethi, president, Tien Sher Group of Companies: “I didn’t expect our first two phases to sell as fast as they did: the first in four hours and the second in 67. But because of the affordability of the land, we could develop a community no different than Yaletown for a hell of a lot cheaper and, in many ways, for much better quality. Downtown Vancouver will always be downtown Vancouver, but City Central has the space to build in and the infrastructure to support it. There is a lot of activity here and a huge demand for projects in the region.”



The Marketer

Vince Taylor, partner, Pilothouse Real Estate Inc.: “I think Surrey Central will transform rapidly in the next 10 years with much more high-end commercial and residential real estate. Quattro has been a part of this change: it’s affordable without sacrificing quality. But will the area still be affordable in the next decade? I don’t think so.”


The Visionary

Dianne Watts, mayor, City of Surrey: “We’re larger than Miami, Tampa Bay and Sacramento; the challenge Surrey faces is changing the mindset that we are a suburb of Vancouver. We need a high-density downtown, and in Surrey City Central we have an opportunity to build one from the ground up. We are able to provide opportunities to set up small businesses, ensure jobs and education facilities for our residents, and provide civic services in an affordable and accessible area. We are moving from suburbia to an urbanized centre.

[pagebreak]

On the Rebound

Downtown Victoria

Downtown Victoria’s population dropped substantially in the ’80s when new health and safety standards effectively condemned the upper floors and lofts of many of its historic buildings. As tenants left, new residents were not permitted to move in, and the spaces were left unfilled. To address this concern and revitalize the downtown core (a roughly 80-hectare area bounded by Chatham, Belleville, Blanshard and the harbour), the city responded in 1996 by offering developers bonus densities to launch residential projects. Tax incentives, designed to get downtown’s historic buildings up to contemporary building codes, generated $182-million worth of new investment in 2000-01 and led to the creation of 538 new residential units in the core over 10 years. Downtown Victoria’s population is now estimated at close to 1,900 residents, up roughly 50 per cent since 2001, putting the population back to where it was in the 1970s. While the fair weather, easy harbour access and quieter pace of life have long been attractive draws for American, Albertan and West Coast retirees and investors, these days younger local buyers are finding much to like in the revitalized core.
 

The Project

The Falls, 707 Courtney St., Victoria.
Two towers (14 and 18 storeys) with 12,000 square feet of retail space and 155 residential units. Priced from $400,000



The Developer

Dave Leung, development and project director, Westbank Projects Corp.: “Victoria has been consistently ranked as one of the most livable cities in the world. It’s a vibrant city with great potential, but at the same time it’s away from all the hustle and bustle of a major city like Vancouver. The Falls helps fill the demand for quality, higher-end development and good retail space, largely made possible by the city’s efforts to revitalize the downtown core and its willingness to grant the density needed for a successful project.”

The Marketer

Peter Gaby, partner, DFH Real Estate Ltd.: “The recovery has been remarkable. Interest rates have allowed for more affordability and more developers have been revisiting their applications as sales reach record levels. Absorption may be an obstacle, and too many applications could over-saturate the area, but downtown cores are always a good investment.”

The Visionary

Mark Hornell, assistant director of community planning, City of Victoria: “We are one of the few places in North America that offers an urban West Coast lifestyle within a moderately scaled, historic downtown with direct access to the harbour. Victoria’s downtown is compact, well connected by transportation, highly walkable, with room in the larger core for much more residential and commercial development. Its beautiful setting is key to our competitive advantage. We aim to protect and build on it.”
[pagebreak]

On the Rebound

Richmond City Centre


The latest in a series of incarnations for Richmond has seen its core transformed from a strip of big-box furniture stores and sprawling shopping centres to a series of mixed-use residential and commercial towers. The recently opened Canada Line, linking Brighouse Station to Vancouver’s Waterfront Station in 25 minutes, is widely credited for the shift, and developers are responding with ambitious projects of their own. Whereas most growth in Richmond has previously been in single-family neighbourhoods, the city’s core, a 930-hectare area in the northwest portion of the island, is where most of the future growth is expected. To deal with an anticipated 50,000 new downtown residents by 2030 (double the current population), the city has created six high-density centres around the Canada Line, granting developers the zoning and density needed for office towers and residential highrises in exchange for parks, community centres and other cultural amenities. Some of the projects already on the books include a new campus for Trinity Western University, a community centre and a daycare near Lansdowne Station, and a riverside park adjacent to the Olympic Oval.
 

The Project

Remy, 4099 Stolberg St., Richmond.
251 condo units priced from $149,900

The Developer

Dana Westermark, president, Oris Consulting Ltd.: “We saw an opportunity to give more bang for your buck. The impact of the Canada Line is underestimated: for 50 per cent of the cost, you can now get a similar unit with the same look and feel as a project at the other end of the line. The differentials between southeast False Creek and north Richmond will narrow as the market improves and the cost of developing high-quality buildings with high-quality amenities balances with prices.”

The Marketer

Sean Lawson, marketing manager, Remy project: “Richmond has gone through many different phases, from bedroom community to having its own city centre. Now the Canada Line acts as a driving force for further densification of the core. With the relaxation of [Canada Mortgage and Housing Corp.] requirements and the low prices we were able to provide in this area, we achieved our goal of building affordable market housing. Students, young couples and investors have all been interested as rents easily cover mortgage payments.”

The Visionary

Terry Crowe, manager of policy planning, City of Richmond: “It’s not business as usual. Most growth to date had been outside the city centre, but with the Canada Line, we wanted to create complete transit-oriented communities: urban villages where people can live, work and play. Density and height, as a result, will go up; the city centre will no longer be low-rise industrial and commercial spaces but high-tech offices, highrises and public amenities. The plans are in place, and developers have the density and certainty they need to build.”
[pagebreak]

On the Rebound

Abbotsford


Abbotsford is one of the fastest-growing municipalities in B.C., with a population that almost quadrupled between 1975 and 2005, from 35,000 residents to 135,000. Agriculture has always been central to the area’s economy, with roughly 12 per cent of residents employed in the sector, but increasing numbers are now working in such fields as manufacturing, retail and health care. To accommodate this shift, the municipality adopted its City in the Country Plan in 2004, carefully demarcating urban and agricultural land use by adding density to the city’s core while preserving the farmlands that represent 75 per cent of the area’s land. New developments such as the Abbotsford Regional Hospital and Cancer Centre (which opened in August 2008) and the Abbotsford Sports and Entertainment Centre (which opened in May 2009), as well as the expansion of the University of the Fraser Valley, signal a city in transition. Meanwhile, a recent $55 million from the federal and provincial governments for the development of the Clearbrook Road Interchange project and an additional runway at Abbotsford International Airport is helping to address the region’s growing infrastructure needs.
 

The Project

Argyle, 34248 King Rd., Abbotsford.
95 two- and three-bedroom townhomes priced from $279,000

The Developer

Mike Maschek, vice-president, Rykon Group of Companies: “There is an opportunity for investment in Abbotsford, but the area was hurt by excess inventory after the market downturn and needs to diminish its oversupply of condos. The development potential of the city itself is huge: it has the location, proximity to Vancouver and most of the amenities small communities lack. In the case of Argyle, we saw an opportunity in the high-$200,000 to low-$300,000 range for those people looking to downsize or buy their first home.”

The Marketer

Barb Hughes, sales manager, Argyle: “Abbotsford offers the same amenities as living in the centre of town but without all the hustle and bustle. It has a brand new state-of-the-art hospital, a new university, sports centre, entertainment centre and lots of community services. It has easy access to Vancouver but, unlike what you’d think, most of the buyers we’ve seen both live and work in the area.”

The Visionary

Jay Teichroeb, economic development manager, City of Abbotsford: “The anchor of Abbotsford has always been and always will be agriculture, so we have created very stable boundaries between our agricultural and urban areas. We’ve seen periods of tremendous growth since 1995, and the challenge for us is to use our urban land very carefully and efficiently. Whether it be 10 or 50 years from now, you will still see a city recognized as a farming community, but with local businesses growing to medium- and large-scale operations alongside the expanding population.”