Mixed-use developments in Metro Vancouver are ripe for investment

by Ephraim Vecina28 May 2019

Large-scale developments in Metro Vancouver offer multiple opportunities across a diverse range of asset classes, according to Avison Young’s latest market analysis.

In particular, mixed-use developments – also known as “urban enclaves” – situated near rapid transit lines and other public transport routes have proven quite attractive to investment capital.

“Metro Vancouver and its constituent municipalities have encouraged developers to build along transit corridors and allowed higher densities at development sites that had long been established as commercial retail nodes such as regional malls,” Avison Young explained.

These districts are slated to become even more important, considering the dearth of developable land in Vancouver.

“As land prices have risen and the availability of development sites declined, investor interest has grown exponentially in the redevelopment of typical low-rise shopping centres and the adjacent surface parking lots that form a substantial part of most traditional car-centred regional malls,” Avison Young noted.

Such pockets of reliability and stability can help offset what the Bank of Canada deemed as “pronounced imbalances” in the largest markets brought about by foreign investors.

“Froth from rising expectations of house price growth has declined in housing markets in the Toronto and Vancouver areas over the past two years. While the Toronto market appears to be stabilizing, prices and resale activity continue to decline in Vancouver,” the BoC stated in mid-May.

“Households in British Columbia and Ontario have the highest median net worth, and their net worth is more concentrated in housing. These provinces also have the most pronounced imbalances in their housing markets, partially due to investor activity, and are the most indebted as measured by the ratio of household debt to income.”

 

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