It was only a couple of years ago that Vancouver’s presale condo market was so hot that you could flip a unit before it was even built, avoiding the closing costs and scooping up a tidy profit in the process. Now the condo market has cooled, however, and some of those presale owners who expected to make money are cutting their losses.
“There was an interest in rental projects because the economics for rental were improving,” Mr. McNeill says. “There was a supply constraint. We were seeing rental rates rise. So we had the cost of bringing these projects to life coming down and the revenue side was coming up, and the tables were turning. The cities were able to give extra goodies to developers to entice them to build rental, and that alignment of planets started to motivate the developers.
He’s seeing some desperate sellers in the current market, including people who’ve lost their jobs due to the pandemic. But he believes it’s more of a lull than a dead end for Vancouver’s condo market. Once the market recovers, Mr. McNeill says, big institutional investors will continue to build rental projects and a lot of developers will return to condos.
Geoff Nagle is director of development, Western Canada, for Morguard Corporation. Ontario-based Morguard has managed the Coquitlam Centre mall for decades on behalf of the pension funds that own it. The purchase was made with the expectation that SkyTrain would come through the area. Now that it has, Morguard is planning to build out the acreage with office, retail and rental residential towers as part of Coquitlam’s emerging urban core.
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