Momentum increased in the apartment market during the third quarter, as investors pushed the total number of multifamily sales in the Lower Mainland to 71, up from 39 just three months ago.
The tally comes from David and Mark Goodman of Macdonald Commercial, who credit the activity to low interest rates.
With lenders such as Realtech Capital Group Inc. advertising five-year financing at 2.85%, buyers can’t help but leap in.
“The depth of the market will increase because of these interest rates, just because more people can afford to [buy] now,” Mark Goodman said. “That’s what’s still fuelling the apartment market.”
Terry Harding, vice-president with NAI Commercial in Vancouver, who specializes in apartment sales, said mortgage rates are below what multifamily properties are yielding.
“Three-per-cent, five-year money is really attractive to people,” he said. “They’re borrowing at 3%, they’re getting about 5%, so they’re getting positive leverage. Putting it in the bank, they’re not getting that.”
On the supply side, many owners are happy to sell while the appetite for multifamily properties is strong because of the prices possible. While this isn’t true around the province, it’s reflected in Boardwalk Equities (B.C.) Inc.’s decision to list its portfolio of 225 units in Burnaby and Coquitlam with NAI for $35 million. Harding was reviewing offers on the three wood-frame properties in question last week. Toronto-based Transglobe Property Management Inc. is also shopping its local portfolio, as is a private investor with 250 units in Prince George.
Goodman said the momentum is likely to push the total number of deals for 2010 to more than 90, up from 74 last year.
The world’s first so-called living buildings have received recognition from Seattle’s International Living Building Institute.
Developed under strict criteria that include 16 prerequisites for qualification as living buildings, the project’s aim, according to the institute’s trademarked phrase, to be “Socially Just, Culturally Rich and Ecologically Benign.” Through savvy design and smart technology, the properties aim to be “restorative, regenerative or merely net-zero impact.”
Of the nine properties in B.C. eyeing certification, the first of the lot – Victoria’s EcoSense home – received partial certification from the institute. Ann and Gordon Baird achieved prerequisites in four of the six categories the institute assesses. The 2,150-square-foot home ranked in the areas of site, net-zero water use, indoor environment and beauty and inspiration.
Where it fell short was in the areas of materials and energy. While options for sourcing materials have improved in the two years since the home was built, Ann Baird noted that cooking poses a significant challenge when it comes to meeting the institute’s criteria for energy use.
EcoSense houses three generations and six members of the Baird family, and most of the food is cooked from scratch. To be a living building, the home would have required a significant investment in solar panelling to garner the energy required for cooking meals, as wood and other combustible fuel sources are not allowed. This wasn’t viable for a single home, especially when ancillary environmental costs of producing and installing the panels were considered. While the home is a net supplier of electricity to the grid, the Bairds don’t receive credits from BC Hydro because metering isn’t sufficiently sophisticated to track the exchange. Nor is there a preferential tax rate for the $80,000 in green technology installed at the home.
“It was considered a high-end luxury custom house,” she said, even though the construction value of the home is pegged at just $370,635. That translates to an extra $350 a year in municipal property taxes. “These other living buildings that are created now? They have a higher energy premium and cost,” she said. “Their buildings will be assessed for that and they will actually pay extra taxes based on that because they’re doing the right thing.”
The bustling centres of Vanderhoof and Horsefly were the two areas of B.C. to see an increase in the value of farmland during the first half of this year.
According to Farm Credit Canada (FCC), the overall value of the province’s agricultural land dropped as real estate markets softened – the sole province in Canada to see a decline. While values in Canada rose an average of 3%, B.C. posted a drop of 0.9%. It was also the second decline in 18 months; values also dropped 0.7% in the first half of 2009, while remaining stable in the latter half of last year.
Commentary with the semi-annual report attributed the drop to “economic factors largely external to agriculture,” including “economic uncertainty and the high Canadian dollar.”
FCC senior appraiser Doug Janzen did not return calls for comment on the drop in values.