SEPTEMBER MARKET UPDATE
MARKET COOLDOWN NUMBERS
Tri-City housing market was red hot in spring but showing signs of slowing over summer. Total sales dropped 29% over summer from 501 sales in July (across all property types) to 351 in August.
Price declines have also shown up in the data, with median selling price for a detached home in Coquitlam dropping from $1,250,000 in July to $1,108,750 in August (down 11.3%). Attached properties saw a 8.5% decrease (from $685,019 to $627,500). And apartments saw a 5.6% drop (from $411,250 to $388,000).
In Port Coquitlam, median selling prices for detached houses fell from $884K to $848K (4.1% drop) while apartments fell from $316K to $309K (down 2.1%). Not enough transaction in attached homes to be included in the data.
In Port Moody, only apartments had enough transactions to be included in the data, and notably there was a price hike from $435,000 to $489,000 (up 12.5%).
While the numbers have been trending downwards for the past couple of months, the provincial government’s recent 15% tax on foreign home buyers is undoubtedly adding to the downward pressure. While the new foreign buyer tax is reducing foreign buyer activity, it is also causing uncertainty among local buyers and sellers.
Despite the drop in total transactions, we are still in a Seller’s Market with the sales-to-active listing ratio at 29.3% (15-22% is considered relatively stable).
COQUITLAM ILLEGAL SUITE CRACKDOWN
Enforcement is ramping up for “impermissible” secondary suites in Coquitlam. Regulators will be combing through Craigslist and MLS with a special focus on the impermissible suites.
According to Stephanie James, Coquitlam’s acting Director of Bylaw Enforcement, the City will be cracking down on rental and real estate advertisements promoting secondary suites in residences where they are not allowed.
She added only single family homes are allowed to have one (1) suite, while suites in multi-family residences, such as townhouses and duplexes are prohibited. Homeowners with illegal suites could receive a fine.
In other words, if you own a townhouse or duplex with a suite downstairs and are caught advertising it for rent on craigslist, or for sale with a suite on the MLS, you could receive a fine.
The new $1.43 billion Evergreen Extension is set to open before Christmas, Port Moody/Coquitlam MLA Linda Reimer and Coquitlam Mayor Richard Stewart were proud to announce at a press conference this month. The news of the opening heard a sigh of relief from residents and Douglas College students, following the original completion date of 2014, and the second one for summer of 2016. Tri-City residents will be riding the rails come Christmas-time, and will be a welcome Christmas gift to many, perhaps especially to condo investors within walking distance from skytrain.
It should be noted that Translink CEO Kevin Desmond has announced a name change to the new line. The Evergreen Line shall be hereafter referred to as the “Evergreen Extension” which will technically be part of the Millennium Line. The Millennium Line will now run from VCC-Clarke to Lougheed Town Centre, and will include the six (6) new Evergreen stations when they are opened. There will now be two (2) Expo lines, which will run to King George in Surrey, or to Production Way in Burnaby.
The changes to the Millennium and Expo lines will be coming into effect October 22, 2016 in order to get riders prepared for when the Evergreen Extension opens sometime in late November or early December.
There will be a new $5 million, 110 stall Park and Ride, located directly across from City Hall on the southeast corner of Pinetree and Guildford, with another 40 spots dedicated for Evergreen riders on the surrounding streets.
The 97 B-Line expected to be eliminated following the opening of the Evergreen Extension.
The new extension is expected to draw 70,000 riders daily by 2021 and result in 40,000 fewer car trips.
THE CITY OF LOUGHEED
Forty acres by Lougheed Mall will undergo an epic transformation into The City of Lougheed. Inspired by world class cities, it will be complete with 23+ stunning high-rise towers, diverse neighbourhoods, shopping and restaurants, striking architecture and the most connected SkyTrain hub in Metro Vancouver. Imagine all the energy of downtown, in the region’s most central location.
There will be 500+ homes in Tower One priced from $329,900, with previews starting October 1, 2016. While not technically in the Tri-Cities, the City of Lougheed will be directly on the Burnaby/Coquitlam border and will be an effective gateway into the Tri-City, and significantly impact the local economy and real estate market.
TOWNHOUSE DEVELOPMENT APPROVED BURKE MT. RANCH
A townhouse development with a 4.4 acre park will be permitted for the parcel of land known as Burke Mountain Ranch, west of Princeton Avenue, with an additional 75 new parking spaces dedicated for the park. Council passed fourth and final reading on the zoning amendment. All that is left is a development variance permit before the property can be built on.
BURKE ELEMENTARY SCHOOL
Board Chair of School District 43, Judy Shirra says elementary schools are now a top priority in the Burke Mountain community. She noted Burke Mountain was originally planned as a home for families with older children, given the higher cost of new homes. However, as more families were priced out of other areas of Metro Vancouver with secondary suites built as a mortgage helper, Burke Mountain has become a haven for young families. Consequently SD-43 has had to shift priorities of building a 1000 student secondary school to focusing more on building elementary schools.
In addition to Smiling Creek Elementary, for which construction is well underway, the school district is now seeking $17.9 million in funding for building an additional school, Sheffield Elementary, located in Partington Creek.
RIVERVIEW HOSPITAL LANDS
Demolition of the Riverview Hospital lands being well underway, the future use of the lands is still a hot topic for discussion. Sandy Burpee, co-chair of the Tri-Cities Homelessness Task Group argues some land should be dedicated for the creation of new rental and subsidized housing.
Burpee points out that part of the focus of mental health and additional services is to integrate and diversify communities. In other words, by developing residential and commercial components within the new community, mental healthcare services are accentuated as patients are able to be live and breathe in a functioning community, rather than isolated in a sterile environment.
Rather than privatization, Burpee favours community land trusts, which would see the grounds remain in public hands. Several council members, including Mayor Richard Stewart are not in favour of a residential or commercial component in the lands, however, all groups are open to discussion.
HOY CREEK HOUSING CO-OP
More uncertainty than ever is surrounding the future of the Hoy Creek Housing Co-op in Coquitlam after CMHC claimed in court the society that operates the building is in default of a $4.2 million loan.
CMHC has successfully petitioned the courts to name PwC (an accounting firm) the receiver of the Glen Drive property, which includes 60 abandoned townhouses and 157 occupied apartment units.
Bad plumbing, poor design and elements of leaky-condo construction has rendered the 60 townhouses inhabitable, with the last tenant moving out over a year ago.
A fire that broke out last month in an abandoned unit has led to the City of Coquitlam issuing a letter demanding the structures be demolished as soon as possible.
Court filings have revealed CMHC stating the demolition would cost $2 million which the co-op is unable to afford at this time.
Two years ago, Hoy Creek board members planned on selling a portion of the property and using proceeds to finance the redevelopment of affordable housing on the remaining parcel of land. Society members have been in discussion with a developer, however CMHC posits that the co-op does not have the resources to move the strategy forward.
In the co-op’s filing, Hoy Creek values the land at greater than $20 million and has secured creditors, including developer Townline Ventures, that would allow them to cover their $4.2 million CMHC debt in full, but claims they are unable to make the payment while the property is in receivership by PwC.
Regardless of the outcome in court, Coquitlam Mayor Richard Stewart is assured that CMHC intends to maintain and re-establish the affordable housing units on the property.
As the Evergreen Extension perches on the edge of completion, Port Moody’s Coronation Park neighbourhood, only steps away from the new Inlet Centre Station, is the subject of a lengthy redevelopment dialogue.
The proposal includes a mix of townhomes, apartments and highrises that will bring a tenfold increase to the area’s population. There is also a commercial component, a one-acre park, increased access, and a pedestrian over-pass in the works.
The tricky part lies in transitioning from a current single family neighbourhood into a high-density, transit-oriented development with more than double the number of residents than the nearby Suter Brook Village.
The proposed concept would bring Coronation Park’s population from about 500 residents currently to nearly 4,500.
The City is welcoming community feedback on the proposed development.
BERT FLINN PARK
More news on the proposed roadway through Bert Flinn Park, council has opted to defer Coun. Rob Vagramov’s motion to remove the road right-of-way in favour of obtaining a legal opinion, as well as professional traffic, environmental and financial analyses in order to more thoroughly investigate and compare alternatives to the existing proposed David Avenue extension.
A public consultation to review all the options is planned, once all the professional analyses and investigations have taken place.
FRASER MILLS SITE
The Beedie Group has announced that economics will not permit for the multi-storey office structures originally envisioned in their proposal to Port Coquitlam City Council in 2008.
Director of Industrial Sales and Leasing at Beedie, Todd Yuen, represented that while Fraser Mills was previously expected to support a multi-level office market, the fundamentals are just not present at this time. For a chance of success, a multi-level office development needs immediate access to SkyTrain.
Instead, the company displayed renderings of a one-storey structure with small mezzanine. While this is the second time Beedie has come to council requesting a scaled-down industrial development, Beedie Group president, Ryan Beedie, has assured council of their original intention to fulfill their obligation of providing space for an additional 1,500 jobs in the area.
Yuen noted that AG Hair would be moving its head office to the area and that buildings in the proposed development could accommodate specialty employees, like bakers, who would work on multiple shifts.
The proposed changes mean Beedie will have to go back to a public hearing on the matter.
INDUSTRIAL SUPPLY MOVIE INDUSTRY
Increasing demand for industrial space in Coquitlam puts vacancy rates at a tight 1%. Industrial space is increasingly being sought by companies looking to film on indoor sets. However, with industrial vacancy at an all-time low, the amount of filming activity in industrial areas has been limited. While 2016 appears to have been a record year for filming in Coquitlam, next year is projected to be even better. Such pent-up demand for industrial space in the Tri-Cities is projected to increase industrial rental rates and pull values higher.