Year Ahead Poised for Growth in 2014

By Susan M Boyce

It’s the New Year, a time when it’s tradition to plan, dream and predict. This year, as industry watchers and insiders throughout the Lower Mainland spend some time gazing into the proverbial crystal ball, an underlying theme of gentle but solid stability and growth for our local real estate market is emerging — more of the same but a little bit better.

“The term that comes to mind when I look ahead to 2014 is déjà vu,” says Mark Belling, CEO of Fifth Ave Real Estate Marketing. “However, I think it’s important to look at the coming year in context of the cycle we are in. So we’re really looking ahead to the next three years with the pattern of prosperity that started in 2013 to continue through 2014, which will be a set up year for modest growth in 2015 and 2016.”

Steady As She Goes
Speaking at two independent conferences near the end of 2013, two prominent experts — Michael Ferreira, managing principal of Urban Analytics, and Neil Chrystal, president and CEO of Polygon Homes — both made five predictions for 2014 and, perhaps not surprisingly, three of them were the same.

Continued low interest rates was top of the list for both men — and that’s good news for consumers. “There’s been a lot of talk about how these low rates can’t be the norm,” Ferreira acknowledged. “But I do not see rates going anywhere anytime soon — certainly not over the next two years, possibly three.”

Ferreira and Chrystal both also ranked consistent international immigration, especially from Asia, and ongoing land supply constraints as two of their predicted top drivers for the coming year. Ferreira stressed, however, that contrary to widespread belief, not all investor class immigrants are high net worth individuals. “A lot are middle income: people like ships’ captains, bus drivers, technicians. They’re buying in places like North Delta, Coquitlam and Burnaby, and they’re buying their homes to live in — not as a place to park money.”

Riding the Master Planned Wave
Another of Ferreira’s predictions for 2014 was to expect “urban masterplan mania” to continue ramping up, and he noted the upcoming Oakridge redevelopment by Wesbank and Shape Properties’ ambitious plans for Brentwood Mall are two he’ll be watching closely. “Surrey City Centre will also surprise people,” he added. “If you haven’t been there for a while you should go.”

Yosh Kasahara, Wesgroup Properties’ director of sales and marketing, also believes the movement toward thoughtfully conceptualized, masterplanned communities with a mixed-use component will gain momentum in 2014. “It’s no longer just an apartment or a townhouse, it’s about everything else around you — where you walk your dog, day care for your kids, proximity to your favourite restaurants.” He points to River District in southeast Vancouver as one ongoing, successful example. “River District looks very organic but is actually carefully and purposefully planned to feel authentic.”

“More and more, people want neighbourhood amenities that become like an extension of their living/dining room,” adds Bill Szeto, president of Otezs Marketing. “I expect lifestyle considerations to become even more of a focal point in the home buying process in 2014.”

Speaking to Buyer’s Dreams
As completion for homebuyer’s dollars heats up in 2014, many experts are stressing the need for more targeted product that speaks directly to consumer’s desires, needs and pocketbooks. “We must begin to concentrate on different offerings for different consumers — especially when we are considering the affordability factor,” Kasahara says. “For example, there are some people who absolutely need three bedrooms — a family with three kids who need to be in a specific location for work. How do we make homeownership possible for them? It could be having smaller appliances and laminate flooring instead of hardwood. But what’s important is finding ways we can tailor our offerings to specific target demographics.”

And while affordability factors heavily into the home buying equation, it’s not the only consideration. Larger, more luxurious condos are making a comeback that’s expected to gain strength in 2014 — especially among the many wellheeled Baby Boomers who would likely find downsizing from a house to a two bedroom condo too severe a change.

“There is a whole mentality shift coming,” says William Lin, CEO of Rize Alliance. “For the last 20 years, we thought the only way to increase affordability was to decrease size. But it can become too much of a compromise. If an apartment, or even a townhouse, is so small it’s unusable, it becomes more like an excuse for homeownership. Homes must feel comfortable and inviting — no matter what the size.”

The Bottom Line
For consumers planning a home purchase during the upcoming 12 months — no matter what that purchase looks like — 2014 is shaping up to be an exciting year. Low interest rates, less pressure to ‘hurry up and buy,’ plus ever more creative and enticing incentives offered by developers are expected to keep the market lively and diverse.

“Now is such a unique opportunity to get into the market,” Kasahara says. And being able to lock in your mortgage rate for five years is such a strong incentive to buy.”

“The biggest message buyers need to hear is that this is a great time for buyers to get into market,” Ferreira says. “So get out there and take the leap of faith.”

Source: New Condo Guide

1. 3 Civic Plaza is tallest building south of the Fraser River and the third anchor in Surrey’s new downtown city centre.
2. Trendy, sophisticated and flexible, Glasshouse Lofts is the newest addition to the Port Royal masterplanned community in New Westminster.
3. River Green in Richmond features a riverside location, five-star amenities and a skybridge with art glass walls.
4. The Prescott in North Vancouver offers spectacular views and ideal location in Central Lonsdale.