Vancouver’s high-rise condos have experienced a steady increase in value over the past few years, mostly due to rising construction and land costs.
According to new research by Altus Group, an acre slated for a high-density residential project in Vancouver can be valued up to as much as $40 million. This has propelled the city’s per-buildable-square-foot cost for high-rise residential housing up to $325 this year, far exceeding the metric in other popular condo markets like Toronto ($225), Winnipeg ($60), and Edmonton ($50).
As a result, the average price of a new high-density condo unit in Vancouver went up by 39% annually, up to $1,345 per square foot.
In anticipation of intensified investment and purchasing demand, developers will begin the construction of around 210,000 new homes and 300 million sq. ft. of new commercial/industrial space nationwide (per Altus Group estimates) this year.
The national construction sector had $87 billion in residential projects and $53 billion in commercial/industrial developments in 2018 alone, Western Investor reported.
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However, despite the seemingly strong prospects, sales lethargy and price slowdown continue to characterize Vancouver, according to the Real Estate Board of Greater Vancouver.
Overall home sales fell by 32.8% year-over-year in February, settling at a point 42.5% lower than the 10-year sales average for that month, BNN Bloomberg reported.
Vancouver’s benchmark residential price across all asset classes declined by 6.1% annually, ending up at $1,016,600. Detached homes fell by 9.7% (down to $1,443,100), and townhouse values shrunk by 3.3% (down to $789,300).