Neighbourhood Watch: Vancouver Real Estate's Affordable Housing
Six greater Vancouver areas – Mission, Surrey, Burnaby/New Westminster, Southeast Vancouver, Hastings Street and Squamish – still have deals on offer for the savvy buyer willing to look beyond the central city real estate market.
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.
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.
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