The secret’s out — good deals, even waterfront

PETER BATTISTONI
Sun

Latest testimonial to the development industry’s hopes of robust new-home sales in New Westminster is the Point. How soundly Royal City developers should be sleeping at night, however, divides industry watchers.

THE POINT

Presentation centre: Sixth and McBride, New Westminster

Hours: Noon to 5 p.m., Sat. – Thu.

Telephone: 604-522-8813

Website: www.onni.com

Developer: Onni Group of Companies

Architect: KMBR (Killick Metz Bowen Rose Architects Planners Inc.)

Project size: 23 storeys, 146 residences

Residence size: 630 sq. ft. – 1,195 sq. ft., 1, 2 bedrooms, plus penthouses and live/work spaces

Prices: From $219,000

Warranty: National

Completion: Early 2007

Judging by the numerous billboards, on the major streets in New Westminster, advertising new-home projects, it is easy to conclude that one of B.C.’s oldest communities is undergoing a rebuild as a multi-residential community.

New Westminster has all qualities that attract developers and, they hope, new-home buyers.

SkyTrain links residents to downtown Vancouver in a commuting time of about 30 minutes. Amenities like parks, entertainment and shopping are well established. And land is cheaper.

“This is a community that is really undergoing redevelopment,” says the Onni Group’s Greg Zayadi, who is overseeing the marketing of the Point, the latest condominium project to come along downtown.

“A lot of companies are coming out with new buildings in New Westminster. It’s an attractive city to be living in . . . with features here like SkyTrain and the waterfront and a price point that allows for a younger demographic.”

While developers appear to be racing to this development friendly community, thanks in part to lower land prices and a city hall which goes out of its way to ensure there is no “red tape,” a recent study found supply may eventually outstrip demand.

The PricewaterhouseCoopers’ Greater Vancouver Condominium Market Review found the number of projected residences was five times what was necessary for normal growth in Burnaby-New Westminster.

“We track what the developers are planning and come out with a survey every six months so there’s detailed information available,” says PricewaterhouseCoopers vice-president Craig Hennigar.

“In the Burnaby-New Westminster market their planned starts are 3,600 new units for the next two years. They have a total application for 7,095 and are planning to start about half of them.

But we’re expecting to see a demand in the next two years for only 945 units. . . . This suggests there is a chance there could be an oversupply.”

Jennifer Podmore, another tracker of condominium projects, disagrees. The co-founder of MPC Intelligence believes the PwC report’s expectation of supply outstripping demand won’t come to pass.

Podmore says the PricewaterhouseCooopers report based its figures on “historical demand” for new units that reflects local, already in New Westminster, demand.

Instead, she says, what is happening is new buyers are moving into the city from elsewhere — places like Vancouver, Burnaby, Surrey and Coquitlam.

“People are getting out-priced out of other markets and are seeing New Westminster as a viable alternative,” says Podmore. “It’s like the secret is out about New Westminster. It’s a place where you can get great price per square foot. They are offering a good deal.”

In downtown Vancouver buyers would spend $550/sq. ft. on a product they would spend $350 per sq. ft. in New West, she says.

Podmore also notes that New Westminster has a great transportation system, there’s no traffic bridge to deal with for commuters and it’s going through a gentrification process around Columbia.

“There still is a lot of supply coming into the market over three to four years. There isn’t going to be a big glut [of new condo project]. We don’t perceive of thousands of units entering the market in one quarter. The entrance [of new condo projects] is phased.”

There’s also the benefit of a diversity of projects, from townhouses, low-rise condos, highrise condos to waterfront condos, she says. “That waterfront is fantastic. Where else could you get waterfront property stuff for under $300,000?”

She says New Westminster makes sense for purchasers who don’t want to compromise with the size of condo. As an example, she says, a two-bedroom condo at 930 sq. ft. on the waterfront can be found in New Westminster for under $300,000.

Some of the condos selling or recently sold in New Westminster include Anvil, Azure, Belmondo, Cooper’s Landing, Eagle Crest Estates, Generations, Murano Lofts, News, Quantum, RidgeView and Victoria Hill.

In many of these developments there is only a handful of condos available. The majority would be around the 75 per cent sold out, says Podmore.

Besides the Point, other new projects on the scene include Red Boat and Paddlers Landing.

There are also about 20 development applications at city hall in various stages, from a six-suite townhome project to the five-tower proposal in the 600 and 700 blocks of Front Street.

“All indications for New Westminster and all of the projects is quite positive,” says Podmore. “As long as interest rates stay relatively stable and labour growth stays on the same path they’ll be doing fine.”

Podmore says there are around 15 projects now on the market in New Westminster, compared to five years ago when there would only have been two or three.

“The level of absorption is much higher now than before. It’s unprecedented. We’re actually selling out as an industry before completion.”

But Hennigar warns that even if the market now appears to be strong, the community can only expect a certain amount of growth. He points out the last big population boom to the Lower Mainland was in 1992 when there was about 37,000 new people. This year 21,000 are expected.

“Developers are suggesting more people are moving here but it hasn’t been proven. It’s is possible people’s tastes are changing and maybe there is a trend but there is no evidence of that. It’s a gut feeling the developers are running with,” says Hennigar.

Hennigar says while he realizes developers are enthusiastic about New Westminster he expects they will heed the report’s findings and likely scale back their projects because no one wants to see an oversupply, except of course the consumer who would benefit from competitive prices.

© The Vancouver Sun 2005

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