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Condominium Culture in Yaletown Real Estate Riding High

Presented by some as Vancouver’s challenge to the Manhattan’s Soho, Yaletown is a thriving district which is emerging as an area for hot property deals thanks to its enthusiastic start-up culture and increased number of popular recreational service providers.

New Condominium Boom in Yelowtown

This is also due in no small part to its new immersion in condominium culture. With many new condo projects like, 1335 How (Onni)The Charleston(Onni) and 8X On The Park, both pre-sale condos, the emphasis is on uber-urban living spaces that provide proximity to social watering holes, new-age entertainment and recreational facilities, while also granting aesthetics of residence as high a priority as luxury. Yaletown, in other words, wants to live beautifully and busily, nudging its social spaces to rise up to the challenge.

1335 Howe by Onni
1335 Howe by Onni – customizable home near Yelwtown district. Image source: Onni Group

This emphasis on aesthetics is by no means superficial and transient. Yaletown has always been a district careful of appearances and the impressions they generate. Real estate developments just prior to the current phase would focus on maintaining the old logic of stepping, adhering to the natural slope of the region and aligning heritage cornices with newer structures. For instance, Amacon’s project, the 118-150 Robson, proposes to rework the Northern Electric Company Building, a structure from Yaletown’s ‘heritage’ period as a warehouse district, into a new high-end structure offering above four thousand acres of commercial space, apart from 125 condominiums and a hotel.

Rise in Price/Square Feet

As for hard figures, the average cost for condos in Yaletown was last recorded in the range of $800 to $ 1000 per square foot, with one bedroom condos starting at $340,000, while the price of the average condo hovers around $555,000. After reaching an April ’17 peak of $890.000 in median price for condos, recent figures have stabilized in the sub-$830,000 region. And the fact of the neighborhood’s immersion is reflected in the fact that these figures are only slightly higher than the median figures for all housing in the same period.

A boom-buyer shift is imminent in Vancouver in general, and in sites such as the condo-rich Yaletown in particular, with millennial residents likely to stay while most of the residents who are older are planning moving out into smaller, even rural, areas, so long as they offer certain securities, such as focus on healthcare. Again, the millennial urge to stay on in Yaletown is down to its thriving youth culture, centered around new enterprises and the choicest varieties of recreational services. All of this, nonetheless, is leading to an alarming gap between sky-rocketing estate costs and relatively sluggish incomes.

But none of this stops the average millennial from either retaining condominium property in the area or purchasing new condo estate: listings for one- and two-bedroom condos dropped between April and June, while new listings for three bedroom condos increased by more than 50%. indicating both the relish with which customers lapped up relatively affordable condos, depleting demand, as well as the aspirational tendency for higher buys speculated by home-owners and property agents. All of which leads to a number of new pre-sale condos all with unique features: 1121 Seymour Residences, the Arc Vancouver, and 498 Drake Street, among others.

The condo wave, in other words, is still riding high.

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Vancouver’s Property ‘Boom’: Heading for a Dark Future?

luxury home vancouver
Currently detached home in Vancouver in Kitsilano.

Vancouver is one major world city that’s had it made in the twenty-first century. From the best of consumerism’s pleasures to the best in Nature’s goodie bag for her adventure-hungry, more-affluent-than-ever children, it comes across as a space of amiable interactions, easy indulgences, natural leisure…

… and huge housing affordability shortfalls for locals.

Trouble in Paradise

Unfortunately, Vancouver’s reputation has made it a magnet for some bad news. Its property market was plagued by real-estate crimes in the past, to be sure, but that was a problem many considered either resolved or easily manageable. Now, however, the city faces a new threat as several locals can be witnessed setting up sleeping bags on pavements and other external spaces.

The urban center marked its apex per-unit cost for homes at $967,500 on average, with stand-alones easily reaching up to $1.831 million. The benchmark rise is an 8.8% growth over just the last year. Simultaneously, it has witnessed 30.8% drop in sales over the year.

Vancouver’s property rates have gotten out of hand, and are too uncontrollable for locals to live up to their domestic dreams.

Info-May-2017
Source: Vancouver Real Estate Board

Non-Local Investment to Blame

The government’s identification of the causes behind this affordability chasm can be deduced from a look at the Vancouver property tax section on the city website. The emphasis on their Empty Homes Tax (which penalizes under-utilized residential spaces) and home-owner grants makes it clear that they are trying to root out non-local Canadian purchasers and foreign investors who buy property away from their source countries to act as tax evasion maneuvers.

In fact, the British Columbia government tried incentivizing Vancouverite purchasers and discouraging foreign participants by introducing a 15% foreign buyer tax and granting first-time home buyer loans. Both these moves have come under attack, however.


Misguided Well-Intentioned Maneuvers

Experts believe that the measures to stave off foreign buyers was flimsy at best, as the main perpetrators behind under-utilized residential spaces that arose from the investment of non-Canadians would easily be able to add the new sum to their usual considerations. Meanwhile, like locals, foreign immigrants on work permits too would suffer the effects of this move, which led BC Premier Christy Clark to announce leniency measures for such workers within seven months of the roll-out of the tax.

At the same time, many see the lure for local buyers as bad economics. Coming as it does at a time when “sellers [are still] reluctant to put their homes on the market”, according to Jill Oudil, President of the Real Estate Board of Greater Vancouver, getting more sub-150k buyers to vie for a limited supply of houses by subsidizing loans for houses costing up to $750,000 will only cease to make cost-effective properties cost-effective. In addition, it will either put many buyers in a spiral of debt as they strive to match their lifestyles to new accommodation, and also because, those whom it targets must able to qualify for 20% mortgages (even though they belong to sub-150k households), which means many won’t, and many others will fall into the dubious trap of additional debt.

The only real solution is to incentivize sellers so as to increase supply-side flexibility.

vancouver-real-estate-2017-May-2

source: Vancouver Real Estate Board
Greater Vancouver May data. Source: Vancouver Real Estate Board