New Westminster condominium marketers are offering buyers substantial incentives to buy homes, making the Royal City a microcosm for the region.
The discounts come as Metro Vancouver residential real estate sales consistently lag about 20% below the average for the past 10 years.
Three concrete condominium projects near Columbia Street are each selling for an average $460 per square foot.
The city's only other concrete condominium project under construction has an average per-square-foot cost of $435 and is in its uptown neighbourhood.
The result is fierce competition and innovative thinking.
Marketers at Censorio Group's Elliot Street project are paying buyers' mortgages for the first two years.
The average Elliot Street unit is priced at $350,000, and most buyers provide a 15% down payment. Assuming that the mortgage is amortized over 25 years, the monthly payment would be about $1,400. Multiplied over 24 months, Censorio's perk is equivalent to a $33,600 discount.
"We didn't raise prices one penny to put this campaign on," said Pilothouse president Bill Morrison, who devised the concept when he took over its marketing about two months ago.
The gimmick's success is clear.
Morrison said Pilothouse has sold 52 of the project's 119 units in the past two months. That compares with 16 sales in the six months following its launch last October.
Meanwhile, Bosa Properties is offering discounts nearly as lucrative. Buyers at its Viceroy project in uptown New Westminster can save up to $20,000.
Sales manager Madonna McLafferty told Business in Vancouver that Bosa's promotion has helped sales since it was launched in March.
She said buyers get a $10,000 credit if they buy a one-bedroom unit, $15,000 for a two-bedroom unit and $20,000 for anything in excess of that.
Her project's per-square-foot starting price is lower than at the Elliot Street and others down the 6th Street hill, partly because the units are larger and larger units tend to have a lower per-square-foot cost.
Her project is also further from the SkyTrain.
"Viceroy is almost complete, so they want to get people in the homes," suggested Dan Thomson, a marketing director at MAC Marketing Solutions who is in charge of the Northbank development.
"Otherwise it will cost them money."
Thomson's project, which Bellenas Property Management is developing, and Salient Group's Trapp + Holbrook are the two developments near Censorio's Elliot Street.
Bellenas is offering $3,000 credits to buyers of one-bedroom units and $5,000 to buyers of two-bedroom units – incentives that have helped sell 39 of 109 units.
Rennie Marketing Solutions principal Bob Rennie said no incentives have been used at the Trapp + Holbrook project he is marketing. Rennie has sold 116 of 196 units in the nine months since sales launched.
He believes the units are desirable enough to sell without incentives, in part because the 20-storey project has retained a historic 1899 facade built to be part of what was the Trapp Block and Holbrook Building. •
