Neighbourhood watch

When a 300-square-foot house hit the market in Toronto last year at an asking price of $179,000, it was an instant media sensation.

Yes, it was outrageous. But here in Vancouver, we’d call it a model of density and we’d pay a premium for it. A recent Century 21 Canada survey touted a 412-square-foot one-bedroom downtown condo as just the thing for first-time homebuyers. The price? A mere $281,000, or $682 a square foot. The Toronto shoebox? Just $596 a square foot.

Based on a five-per-cent down payment of $14,050 and a standard 25-year amortization period, Century 21 Canada Ltd. Partnership pegged monthly mortgage payments for the cramped condo at $1,706.

With larger two-bedroom apartments renting for an average of $1,300, chances are economically minded thirtysomethings won’t be buying cramped one-bedroom apartments in the city; they can build equity in greater comfort elsewhere. By any traditional measure, the “affordable” home in Vancouver is gone. But deals are still to be had for those with money and the will to move east of Boundary Road.

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More transit connections have opened up areas that would have been out of the question for many buyers 10 or even five years ago. The province’s proposed $14-billion upgrade to transit systems in the coming years will make suburban areas even more appealing. New highway systems are also playing a role, especially in the Sea-to-Sky corridor, where Squamish is reaping the rewards of highway upgrades.

The real-estate boom of the past five years is also pushing condo buyers to give wood another chance. While concrete construction has been popular in Vancouver, particularly in the wake of the province’s leaky-condo crisis, wood-frame condos are riding a wave in Surrey. Savvy investors see them as delivering a better return over the long term than the chic but significantly more expensive concrete units sprouting around SkyTrain stations. These may have attracted a following among enthusiastic, but not necessarily sophisticated, investors who expect the market to keep rising.

The good news is that the boom still appears to have legs. Developers have ­largely been disciplined in the face of volatile conditions south of the border, and, while financing conditions are tightening for everyone, downward pressure on interest rates means loans are still affordable.

Armed with an eye for value, buyers are likely to be scouting one of the following six neighbourhoods.

Hastings Street: Follow the sun

Hastings Street is offering some of the best diamonds in the rough for prospective homebuyers, and no, we’re not talking about the area that has caught developers’ attention around the rising Woodward’s building (set to be completed in 2009).

The area that’s gaining attention – and becoming proportionately less affordable as a result – is the Hastings-Sunrise neighbourhood on either side of Nanaimo. While new projects by Bosa Development Corp. and others renovate the main strip,

With comparable West Side homes in Vancouver typically fetching more than twice what properties on the East Side do, the appeal of the area is understandable. The price of a detached home in East Vancouver rose 10 per cent in 2007 compared to 2006, but the average price of $638,900 was still less than half that of a similar West Side property.

“There is still a lot of potential for increased value and probably a little bit more, proportionately, than in some of the other areas of Vancouver,” says Dexter Associates Realty broker Lisa MacIntosh.

The area is about three years behind Commercial Drive in terms of valuations, MacIntosh says. That lag translates into one-bedroom apartments that cost in excess of $300,000 a few blocks west
checking in at somewhere under $250,000 in Hastings-Sunrise. Similarly, a single-family home worth $800,000 and up elsewhere in the city is available here for $600,000. Better yet, the rents are comparable to anywhere else in the city, meaning a prudent investor may actually be able
to wrest a cash flow from a property – a feat virtually unheard of elsewhere in the city.

While the clothing shops and galleries that have sprouted along similar East Side corridors such as Main Street and Commercial Drive haven’t risen in Sunrise yet, a retail renaissance is afoot as the local London Drugs undergoes a redevelopment. The newer condo developments along Hastings are also creating space for smaller retailers to move in, complementing the bakeries and greengrocers that have given the strip a real community appeal.