The developer of a new downtown Victoria condominium tower will offer a price discount, but the deal hinges on favourable construction financing from BC Housing and comes with some strings attached for buyers.
“It is a risk-reward situation for us,” said Byron Chard, chief financial and acquisitions officer with Chard Development Ltd. of Victoria, of its 20-storey Vivid at the Yates mixed-use residential project.
Chard Development, which is an active Victoria developer, approached BC Housing with the proposal, Chard said.
“We are receiving construction financing with 100% of our costs covered through BC Housing at a preferred interest rate,” he said.
The savings on the $50 million in financing, he explained, are being passed on to the buyers in the 135-unit tower as a means for the company “to give back to the community.”
Chard Development began working with BC Housing a year ago under the former BC Liberal government, Chard said of the first such initiative in the capital city. Chard will offer one- and two-bedroom condominiums exclusively at a discount of 8% below current market value. All purchasers must commit to living in the suite for a minimum of two years and must demonstrate a household income of less than $150,000, with preference given to households with income less than $125,000. Buyers must also put down a 10% deposit and demonstrate sufficient financing.
According to the Victoria Real Estate Board, the benchmark price of a Victoria condominium apartment has increased 21% in the past year, with a typical resale condo in the city now selling for $421,400.
Chard will offer Vivid at the Yates one-bedroom condos from about $275,000, with two-bedrooms from about $550,000, Chard said. “This will attract what we are calling workforce housing – individuals who work and live in downtown Victoria.”
The risk for Chard is that under the financing agreement, the developer must reach 100% pre-sales before the financing is released, he said. Its most recent Victoria condominium project took three years to reach a sellout, he said, with the last unit sold as the building was nearly complete.
Chard expects the condo tower to complete in 2020.•