Vancouver’s Multifamily Market Exhibits High Value But Low Volume
Reports indicate that business was brisk in Vancouver’s multifamily market as 2022 began, with private investors and vendors eager to capitalize on strong pricing.
Source: Peter Mitham (Western Investor)
This year’s Goodman Report states that 84 transactions totaled $1.26 billion in value and 11 percent fewer transactions than in 2021.
“Although this is down from the previous year, this result represents more volume than all of 2020,”
says the Goodman Report, noting that activity in the period was the third-highest since 2006.
In 2018, 89 transactions totaling $1.45 billion were completed in the first half of the year. With 87 transactions totaling $1.35 billion, 2017 was the second-best year for the first-half transactions.
82 percent of the market is estimated to be private investors, followed by 14 percent institutional investors, according to the Goodman Report.
“Private investors continue to make up the overwhelming majority of transactions in Metro Vancouver,”
according to the Goodman Report.
According to CBRE Ltd.’s analysis of Metro Vancouver and Vancouver Island, the picture is slightly different. Ninety percent of the market was estimated to be private buyers, while 61 percent was accounted for by private institutions. The number of smaller buyers accounted for just 29 percent of all purchases.
“The institutional activity is expected to continue as we see more amalgamation of multifamily apartment buildings by larger landlords attracted to the strong fundamentals of the BC multifamily market,”
said CBRE.
Photo credit: canva.com
59 transactions totaling $780.4 million have been analyzed by CBRE across the Lower Mainland, including the Fraser Valley. On Vancouver Island, portfolio sales were a minor factor in the market, accounting for only five transactions, primarily Starlight Group’s purchase of 13 properties from Raamco International.
Lack of product is the main challenge for potential buyers.
“There is still lots of capital looking to get into the multifamily market and there is less competing product in the market for investors to choose from,”
said Lance Coulson, executive vice-president of CBRE’s National Apartment Group.
The Lower Mainland’s redevelopment activity has been driven by sites purchased for redevelopment. In the first half of 2022, 16 transactions took place, according to the Goodman Report. The transactions in this period accounted for 20 percent of the total.
A $76 million sale of the Quilchena Gardens site at 4683 Arbutus Street was the largest transaction in Vancouver.
Burnaby’s 9380 Cardston Court and 4221 Mayberry Street were the two largest transactions outside Vancouver, both co-op towers.
In spite of the high prices, especially in Vancouver, the average price per suite declined 12 percent compared with 2021.
Last year, the average unit cost was $491,019, down from $434,419 this year.
Comparatively, the average price per unit during the first six months of 2018 was $494,723 and $408,413 in 2017.
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