BCBusiness

R E N N I E G R O U P S p e c i a l F e a t u r e two or three more households. They're taking some of their equity and helping their children buy a property. That has a huge impact on our market. Have pre-sales of condos ramped up? With supply of new housing as constrained as it has been for the past few years, we have now entered a reality where pre- sale is in nearly every market as the only alternative for those looking to purchase a new home. In fact, according to industry analysts, of the more than 20,000 new homes completing in our region this year, only 50 units will be unsold. What this means is that we are seeing the prevalence and frequency of pre-sale campaigns across our region at a level that surpasses all previous records. Everyone from the •rst-time buyer to the empty nester to the investor is adjusting to this new reality and it requires, for most, that one thinks further ahead about their needs for housing. Take what we have, and will see, along the Evergreen Line as an example—markets in Burnaby, Coquitlam and Port Moody are not new to pre-sale campaigns, but what has changed is that we have gone from seeing 50 to 60 per cent of a project being sold at the launch of a community to the total sellout of communities before the completion of even the parkade. Where this is more pronounced is in how we sell townhomes. Traditionally, the home buyer was not willing to purchase a townhome more than three to six months in advance. Now, again a direct result of constrained supply, we see purchasers willing to wait a year or more for delivery of their home. With so much demand and limited supply, how can a potential buyer navigate this pre-sale market? There's no magic or trick to it. It's more a case of being con•dent in what you're looking for, of having done some research, knowing the size and the price points so that when you enter into a pre-sale program that may be oversubscribed or in high demand, you're able to con•dently make a quick decision. After that, it really does depend on the neighbourhood and the product type you're looking for. That said, there are few things you need to make sure you do: make sure that you are registered with the buildings and communities that you are interested in. If you have a Realtor that you like to work with and trust, then make sure they are on top of this, too. After that, you need to make sure you are following up and that you establish a two-way communication with the sales team in the community you are interested in.Œ Some people believe that developers market exclusively in Asia and that local buyers don't get a chance to buy units that are sold offshore. How do you answer this? The oŽshore buyer simply is not as prevalent in the new-home market as the media would suggest, and that is for a few simple reasons. First, developers will not and cannot get •nancing if they have a meaningful level of foreign investment. Financing requirements are very clear and rigid when it comes to whom developers sell to and even how many units they sell to one purchaser. With little exception, Vancouver developers need to assume conventional •nancing with one or more of the large Canadian lenders and so that alone restricts the amount of participation foreign purchasers have in the new home market. Vancouver is one of the most diverse, multicultural populations in North America and the pre-sales that we enter into no doubt represent that diversity. My hope is that we can start having more of a conversation about the fact that the demand for housing locally continues to outpace supply and, if we can address that fact, then we can then address how we better respond to the needs within the region. How much housing do we need to support the population growth in the Lower Mainland? Most estimates indicate that we will have to build 530,000 new homes before 2041 to accommodate this growth. To put it into perspective, we need to accommodate another Burnaby, New Westminster, North Shore and Vancouver into the area between the coastal mountains, the U.S. border and English Bay to Abbotsford. Rental Renaissance Today's fast-rising rents are the result of an apartment-building slump between 2003 and 2012. But relief is on the way as rental developers play catch-up Conversations about housing, particularly here in Greater Vancouver, tend to revolve around the cost of ownership: how long can prices keep rising? How much will interest rates go up? Where is everyone getting their down payment from? But with rental housing representing more than a third of homes in this region, this more ›exible (and often less expensive) form of tenure is an important cog in our housing market, if not at high-end dining establishments. If we start by looking at the supply side of the rental market in Greater Vancouver, purpose-built rental apartment starts have accounted for an average of 15 per cent of all apartment starts since 1990—not an insigni•cant number. Having said this, rental has played a varying role over the past two-and-a-half decades, ranging from a high of 46 per cent of apartment starts in 2001 to a low of only four per cent in 2007. Furthermore, during an extended period from 2003 to 2012, the region experienced below-average investment in its rental apartment stock, with rental apartment starts averaging only eight per cent of total apartment starts. Even in absolute terms, the 735 rental apartment units started on average each year between 2003 and 2012 was 47 per cent below the 1990¢2016 average of 1,375. As the regional population continued to grow over this period, the consequences of this underbuilding are re›ected in the current state of the rental market in this region. Let's take a closer look. The region's rental vacancy, while not quite at an all-time low, threatens to get there. Having declined for •ve consecutive years, it now sits at 0.7 per cent. (Only 2008, at 0.6 per cent, was lower.) Within the region, 11 municipalities are at or below the regional average vacancy rate, with Delta and UBC having virtually no vacancy whatsoever. The North Shore isn't much better, with West Vancouver and the two North Vans ranging between 0.2

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