Just how much are land developers willing to pay for apartment buildings in the Lower Mainland?
As contentious issues like so-called ‘demovictions’ and social housing continue, a report by HQ Commercial says developers are paying 47% more per suite for rental buildings.
David Goodman says 124 transactions took place in the first 6 months of 2016, compared to 73 for the same period last year in Vancouver.
About 28% of this year’s sales went to developers.
“Last year in Vancouver, average price per suite was $332,000. For 2016 up to $488,000. Clearly indicates to us that it’s not just the developer that’s chasing these apartment buildings, but investors.”
In Metro Vancouver the prices per suite is now $380,000, up 60% from last year.
Goodman says developers are willing to pay up to 50% more because they base prices on land value rather than income.
“The apartment building now can be demolished and improved with a 40 to 50 storey condo high-rise.”
This year Burnaby and East Vancouver lead the pack for most rental buildings sold.