Urban Development Institute...consumers, realtors, lenders, analysts, competitors and developers. 2....
Transcript of Urban Development Institute...consumers, realtors, lenders, analysts, competitors and developers. 2....
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Urban Development InstituteJune 21, 2017
Strange Things Are Happening
A marketer’s perspective on the rapidly changing residential multifamily market in the Suburban Markets of Metro Vancouver.
Presented by:
W. Scott BrownPresident & CEOFifth Avenue Real Estate Marketing Limited
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TODAY’S AIM
To provide an informative and entertaining perspective on the suburban multifamily market, today….. and tomorrow.
To share thought provoking observations and opinions gleaned from day to day interactions with consumers, realtors, lenders, analysts, competitors and developers
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FIFTH AVENUE Overview
Fifth Avenue specializes in the marketing and sales of new residential communities for developers throughout British Columbia, with a specialized focus in the Fraser Valley and select suburban markets in Metro Vancouver.
36 years of “full service” project and sales marketing experience.
Provider of the most relevant, up-to-date real estate information to our clients as we collaborate with them for land purchase through to completion.
Expertise in large scale residential housing includes: condominiums, townhomes, single family, master plan, mixed use communities and resorts.
Fifth Avenue has been the recipient of over 139 industry and community awards of excellence for its innovative work and customer service.
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FIFTH AVENUE Partners
Fifth Avenue’s shareholders include Peerage Realty Partners. A subsidiary of Peerage business partners.Peerage offers an innovative alternative for independent real estate firms that are transacting over four billion annually in sales. Peerage embraces the entrepreneurial spirit of it’s Partner firms by encouraging autonomy while providing human and financial resources to accelerate growth.Fifth Avenue’s, sibling companies include :o Chestnut Park Real Estate, one of the top luxury firms to accelerate
growth in Canada, and the Christie’s affiliate in Ontario.o Baker Real Estate, the leader in new development condominium sales
and marketing in Ontario.
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FIFTH AVENUE INTRODUCTION
As President & CEO of Fifth Avenue, Scott directly oversees the growth and success of the project marketing and sales teams responsible for delivering sales, success and developer to partner satisfaction.
Throughout his 28 years of experience Scott has formed and led teams that have set sales records throughout North America and Asia. He has consistently provided high quality strategic advisory services to leading global and local entrepreneurial organizations, and has expanded his marketing and sales strategy creation, culture development and performance enhancement expertise.
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Don’t Judge Too Quickly
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Don’t Judge Too Quickly
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As a service to our clients and the industry, each
quarter Fifth Avenue produces and distributes a
definitive report on the state of the new
multifamily residential real estate market in
Metropolitan Vancouver.
To ensure the data is collected objectively, we
collaborate with highly regarded Urban Analytics
(UA). UA has been tracking the new multifamily
and resale market since 1994.
To receive the “Fifth Dimension” quarterly update sign up at www.fifthave.caor leave your business card with me.
THEFIFTH DIMENSION
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http://www.fifthave.ca
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Strange Things Are Happening In the Multifamily Market…
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Some Food For Thought:
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52,6
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53,3
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2010 2011 2012 2013 2014 2015 2016
Multifamily Sold Re-Sale (Single Family + Condo)
A Broader Perspective:New Vs Resale
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A Broader Perspective:Resale (Single Family)
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10,000
20,000
30,000
40,000
50,000
60,000
2010 2011 2012 2013 2014 2015 2016
Re-Sale (Single Family)
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A Broader Perspective:Multifamily
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5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014 2015 2016
Multifamily Sold
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The growing municipalities South of the Fraser River and North of the Fraser to the East of Port Coquitlam.
Includes: Metropolitan Vancouver’s emerging true “Second City” – Surrey, White Rock, Delta/Ladner, Tsawwassen, the Township of Langley; The City of Langley, Pitt Meadows, Maple Ridge (Ridge Meadows), Abbotsford, Chilliwack and Mission.
Suburban markets that perform similarly, include Port Moody, Coquitlam and to a degree, Squamish.
Our View of the Valley/Suburban Market
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Fraser Valley Insights - Sales
Low Rise High Rise Townhome
High Rise2016 – 20% (+2%)
Low Rise2016 - 44% (+1%)
Townhome 2016 - 36% (-2%)
Market Share of total Sales in Metropolitan Vancouver
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Fraser Valley Insights – High Rise Sales
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*NOTE: Lack of Supply in South Surrey/White Rock. Expect 600+ Sales in 2018
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Maple Ridge/Pitt Medows Surrey Central/ North Delta South Surrey/White Rock Abbotsford
High Rise Sales
2014 2015 2016 * 2017 Projections
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Fraser Valley Insights – Low Rise Sales
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Maple Ridge/Pitt Medows Surrey Central/ North Delta South Surrey/White Rock Langley/Cloverdale Abbotsford
Low Rise Sales
2014 2015 2016 * 2017 Projections
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Fraser Valley Insights – Townhome Sales
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Maple Ridge/Pitt Medows Surrey Central/ North Delta South Surrey/White Rock Langley/Cloverdale Abbotsford
Town Home Sales
2014 2015 2016 * 2017 Projections
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Fraser Valley Insights – Sales by Product Type
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500
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2014 2015 2016 * 2017 projections
High Rise
Low Rise
Townhome
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Fraser Valley Insights - Pricing
The most affordable – and often under reported – new multifamily homes options are still available here. Affordability is, however, eroding.
Along with growth in absorptions and due in part to a lack of supply townhome prices have escalated rapidly over the past 18 months and have sustained these gains, Condominiums are now experiencing the same phenomena throughout the past 120 days.
For example: a Condominium project in Langley would have taken 12 months to absorb a blended price per square foot of 320+.
Recently we sold out a similar project in less than 6 months at $411 or nearly a 30% increase.
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Fraser Valley Insights – PricingFirst Quarter Market Pricing
High Rise(Average $ PSF)
Low Rise(Average $ PSF)
Townhome(Average $ PSF)
Vancouver – Downtown 1,150 -2,500 - -
Vancouver – West 961 – 1215 806 - 951 868 - 1780
Vancouver – East 650 - 900 550 – 750 750 – 950
Richmond/ South Delta/ Tsawwassen 650 – 850 550 - 610 650 -770
Burnaby/New Westminster 430 - 970 462 – 677 483 – 627
North Shore 647 – 2400 556 610 – 1141
Tri-Cities 510 - 695 463 - 560 386 – 610
Ridge Meadows - 349 - 436 274 - 326
Surrey Central/North Delta 450 - 520 375 – 420 366
South Surrey/White Rock - 385 - 706 325 - 460
Cloverdale/Langley - 390 - 410 270 - 375
Affo
rdab
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Gap
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Abbottsford - 270 - 375 335 - 355
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Fraser Valley Insights – Standing Inventory
Comparison Of Q1 2016 thru Q1 2017
HIGH RISE LOW RISE TOWNHOMES
Market 2016(Q1)2017(Q1)
% of Change
2016(Q1)
2017(Q1)
% of Change
2016(Q1)
2017(Q1)
% of change
Maple Ridge/Pitt Meadows 0 0 - 59 118 100% 73 47 35%
Surrey Central/North Delta 85 135 58% 42 256 509% 438 134 -69%
South Surrey/White Rock 6 0 - 80 42 -47% 267 223 15%
Cloverdale/Langley 0 0 - 256 241 -5% 237 224 -18%
Abbotsford 78 4 -94% 280 32 -88% 78 28 -64%
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Fraser Valley Insights – Inventory by Product
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High Rise
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Townhome
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Looking BackIn 2010, would you have thought…..
100 townhomes could be sold in a day in Langley and would still leave frustrated consumers with unmet demand on the street250 condominiums in a low-rise building in the Valley could be sold out in a weekend at $380+ per square footWe actually have to decide whether or not to do full display home(s)The last 35 plus sales at 3 Civic Plaza in Surrey City Centre, were priced well over $600 per square foot, and select homes sold in the mid $700’s.The next tower to launch in this market will start at an average of $625+ per square foot… they will get it.
Strange Things Are Happening
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Looking Back
2,200 to 2,600 square foot town homes would be built and sold for prices that actually make sense for the developerThe 800 to 900 square foot apartment market would re-emerge largely due to:
a) price appreciation of townhomesb) renewed investor interest
You can sell a 1,500+ square foot condominium at premium prices inan expedient manner.
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Looking Back
We still would not know who won the election two weeks after voting…. Is Green the new Black?Land Prices would rapidly appreciate.Development approval timelines would seemingly lengthen .
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Looking AheadThere have been significant adjustments or shifts in the market and development landscape of late including:
• Sustained escalation with respects to pricing and absorption of townhomes and condominiums.
• The emergence of Assignments. Is this a good thing?• The growing roll of Realtor Co-op. Is this likely to accelerate?• At the same time, rapidly evolving multifamily product
acceptance and adoption or consumer preference is impacting the market in many ways.
• Escalated land prices, making replacement costs high. Is land speculation by non-developers healthy?
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White Rock will see new luxury high-rise offerings launch, successfully pushing the market to well over $900 per square foot
The investor has returned to the Valley in a way not seen since 2007
Due to supply constraints pre-sales are a requirement – for buyers.
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Looking Ahead
Strange Things Are Happening
Avani Center
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Architecture Will Matter… for the most part
Delta Gardens
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NOTE: This will be an important marketing tool.
The Chinese Community is a growing player in the Valley as end user buyers, investors and developers as far east as Abbotsford.The Chinese Community (consumers and developers) is emerging in markets as far east as Abbotsford. With continued immigration and price escalation in more central areas of Metro Vancouver, the influence of this buyer type is expected to magnify and extend to additional areas throughout the Fraser Valley.
Looking Ahead
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Looking Ahead - Continued
More intense competition for land/sites and new entrants.
Supply issues and development approval timing remain a
challenge that impact both developer and consumer.
Growing role of population growth.
Transfer of wealth from Boomers.
The investor may very well just be here to stay.
Will we see more purpose built rentals?
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Comments or QuestionsW. Scott Brown, President & [email protected]
Follow usOnline: www.fifthave.caInstagram: @fifthavenueremTwitter: @FifthAvenueRealEstateMarketingFacebook: Fifth Avenue Real Estate Marketing
Strange Things Are Happening….Let’s Be Social
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Slide Number 1Slide Number 2Slide Number 3FIFTH AVENUE �PartnersFIFTH AVENUE �INTRODUCTION Don’t Judge Too QuicklyDon’t Judge Too QuicklySlide Number 8Slide Number 9Slide Number 10Slide Number 11 A Broader Perspective:�Resale (Single Family) A Broader Perspective:�MultifamilySlide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28Slide Number 29Looking Ahead - ContinuedSlide Number 31