Tuesday, October 30, 2007

Vancouver has the most expensive housing market in Canada

Vancouver has the most expensive housing market in Canada
Homes for Sale
VANCOUVER: On a recent Wednesday evening at the Gotham Steakhouse in the city center here, about 100 people gathered around an open bar for a party given by Ian Watt, a Century 21 broker, who had invited clients to thank them for buying property in the city.

One of the guests was Annu Gill. With her fiancé, Rick Gill, who coincidentally has the same last name, she had bought a 1,200-square-foot, or 110-square-meter, condominium at the Sheraton Wall Center, a 42-story hotel with 74 units in the center of Vancouver. The condo cost 1 million Canadian dollars, or $1 million.

"When I try to explain to friends in the States how much it costs here, they don't believe me," Annu Gill, 29, who is a real estate broker, said of the city's high prices. "They say, 'You're lying.' "

But 830 dollars a square foot - which is how much the couple paid for the condo - is not unusual these days.

The center of Vancouver is the most expensive housing market in Canada, according to a survey of 21 cities worldwide released last April by Century 21. The average sales price for a condo in Vancouver has been about 408,500 dollars this year, up 14.6 percent from last year, according to Royal Le Page Real Estate Services. The average sales price in Toronto, Canada's largest city, was about 235,300 dollars, up 15.7 percent from last year, and in Montreal, 196,400 dollars, up 4.6 percent.

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The number of homes in Vancouver selling for almost 2 million dollars also rose this year, by 48 percent, according to Re/Max Associates. The higher prices reflect years of price gains of 15 to 20 percent, according to Helmut Pastrick, the chief economist for the Credit Union Central of British Columbia.

Fueling the high-end market are foreign and second-home buyers, he said, though not necessarily from the United States. The weak American dollar, which for the first time in decades is worth less than the Canadian dollar, has been making real estate in Canada more expensive for Americans.

Other foreign buyers make up a significant percentage of the market, according to Ian Gillespie, the president of Westbank Projects. The company is building several residential towers in the center, including the 60-story Living Shangri-La, which will be Vancouver's tallest building when it is completed in 2009.

"This is a very multicultural city," said Gillespie, who cited as an example a pharmaceutical executive from the Middle East, who recently bought a 1,700-square-foot, 3.55 million-dollar condo at the Fairmont Pacific Rim.

The city's population has grown substantially as a result. In 2006, there were 36,321 more people living in Vancouver than in 2005, according to Statistics Canada, and 72 percent of the newcomers were immigrants.

It is not hard to understand why the city is so appealing: Vancouver has been described as Canada's version of San Francisco. It has a cosmopolitan feel, yet it is surrounded by mountains and water. The temperate climate attracts retirees, while the vibrant urban lifestyle draws young singles. The economy, supported by forest products, mining and an active film industry, is also growing, thanks in part to the development associated with the city's serving as host to the 2010 winter Olympic Games.

The most expensive condo on the market in the center of Vancouver right now is a 7,000-square-foot waterfront penthouse listed for 17.7 million dollars. The 38-year-old owner, an entrepreneur, said he bought the condo for about 2.9 million dollars four years ago, then sank millions more into renovations.

Jamie MacDougall, an agent with Sotheby's International Realty, said that the condo was still considered cheap, compared with comparable properties in New York or San Francisco. It has been on the market since July.

Although price increases have slowed this year, Vancouver's housing market is not experiencing a bubble, Pastrick said. Less aggressive mortgage underwriting practices have helped shield Canada from the credit squeeze that swept through the subprime mortgage market in the United States.

Bob Rennie, the president of Rennie Marketing Systems, a real estate marketing company, said Canadians typically put down 20 percent in nonrefundable deposits.

Every crane in the center is sitting over a building that is 75 to 100 percent sold out, with large deposits in place, Rennie said. "So the consumer is committed, and the developer is not at risk with construction," he noted. There are about 50 condo towers under construction in the center area.

In 2006, Diana Becker, the owner of a culinary tourism company, paid 875,000 dollars for a two-bedroom in the 37-story Jameson House, which is scheduled to open in 2009. Becker, who now lives on the outskirts of the center, said she had been attracted to the development's design. "It feels very Spanish Moroccan," she said. Becker says she is also looking forward to being able to walk to her favorite restaurants like Le Crocodile.
Not everybody is enthusiastic about Vancouver's growth. To make room for some projects, hundreds of single-room-occupancy hotel rooms for low-income residents have been lost, said David Eby, a lawyer with the Pivot Legal Society, a legal advocacy group. High prices are pushing out middle-income renters and buyers, he added.

Gordon Price, the director of the City Program at Simon Fraser University, said the city had erred in abandoning its commitment to maintaining a 33 percent low-income housing mix in the Southeast False Creek site. The development is being built initially to house athletes during the Olympics. Later, it is to be converted into condominiums and town houses selling for 584,000 dollars to 5.8 million dollars.

The city reverted to a 20 percent low-income housing mix because of concerns about cost, said Jennifer Young, a city spokeswoman, explaining that there had been a drop in government financing for low-income housing.

Darek Cole, for one, said he felt lucky to afford a home in the city. "Vancouver is a difficult place to get into, compared to other cities," said Cole, 26, who works for a marketing company. He paid almost 263,000 dollars for a 600-square-foot condo in the city's Downtown Eastside neighborhood.

"I knew it would be a good investment," he said. By Linda Baker Published: October 25, 2007

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