Condo Market Converts
Condo-market converts
With single-family house prices averaging $500,000, more first-time buyers are putting their money into less expensive highrise alternatives.
Pedro Arrais
Times Colonist
CREDIT: Debra Brash, Times Colonist
Like many condo developments, Dockside Green has set up an
off-site display suite to market units to prospective buyers
before the units are built.
CREDIT: Ray Smith, Times Colonist
Simon Leung bought a ground-floor one-bedroom unit in a
downtown condominium for his daughter, who is a University of
Victoria student. "Investing in a condo is better than
renting," he says.
Simon Leung, an information technology manager, came up with what he says
is the perfect solution for his daughter's housing needs while she is
attending the University of Victoria: He bought a one-bedroom condo with a
den downtown.
"Investing in a condo is better than renting," says Leung, 50. "If my
daughter decides to leave Victoria after graduating, I can explore the
real-estate market at that time."
Leung is among the hundreds of home-buyers and investors who are turning
to condos as prices climb.
With the median cost of a single-family house in Victoria pegged at
$529,000, the reality of home ownership for many lies in the relative
affordability of condominiums, whose median price is $325,000.
Leung paid $249,000 for his daughter's 780-square-foot condo.
A quick search for condos in Victoria on the MLS website shows properties
ranging from a 630-square-foot one-bedroom suite selling for $99,900 to a
3,800-square-foot, two-storey penthouse -- "a penthouse above all
penthouses," according to the realtor -- with an asking price of $4.55
million.
Scott Kendrew, president of the Victoria Real Estate Board, reports a
significant rise -- the highest in seven years -- in condominiums for
sale, with 902 active listings at the end of August, compared with 397 a
year ago. This number does not include condos for sale that do not appear
on the MLS, such as units offered at Bear Mountain.
Kendrew is happy with the large number of listings.
"The market is far healthier, more balanced now," Kendrew says.
"There is more to choose from and that's good for the buyer and good for
the seller."
There are more one-bedroom units being built and a move away from the
traditional two-bedroom condo, which, at 70.8 per cent in 2005, previously
dominated the market share. Figures from 2006 show apartments with two
bedrooms dropped to 55.2 per cent and one-bedroom units grew from 24.4 per
cent of the total to 41.3 per cent. Three-bedroom units accounted for 2.9
per cent, while a mere 0.6 per cent available were bachelor suites.
First-time home-buyer Kate Kimberley says her 960-square-foot two-bedroom,
two-bath unit in the north Quadra area offers her flexibility in
accommodation. Currently, the second bedroom is occupied by her father,
who is visiting from Costa Rica.
"I was restricted by price," says Kimberley, who paid $250,000. "I would
have preferred to purchase a house but it was just too much."
The choice of a location was less of a problem for Kimberley. "I was shown
condos in the Western Communities but decided on a more central location
in town," she says.
She has no regrets about her purchase. "It's a nice feather in the cap to
be able to say (to my dad) I can afford to live in Victoria."
Ned Boniface, a mortgage broker with Invis, says he sees a growing number
of younger clients buying condos after being discouraged by high house
prices. "It's tough to afford a typical house, even a couple with average
incomes," Boniface says.
On the other end of the spectrum, many older people are downsizing and
moving into condos as well.
"It's tough for older clients from outside of Victoria as they are faced
with having to get a mortgage to get into this market," Boniface says.
Kay Melliship of the Victoria Senior Citizens Housing Society says that
housing catering to seniors is a growing field in Victoria.
"Some buildings are designed anticipating seniors' growing disabilities,"
she says. "It's a certain niche in Victoria."
Melliship says seniors' final choice on a condo is usually based on the
facilities the building offers.
Peggy Prill, senior market analyst for Canada Mortgage and Housing, notes
that along with an increase in sales, there is an equal increase in the
number of condo pre-sales.
"This trend in pre-sales signals a change in the way developers are
marketing their product," Prill says. "Three-quarters of the 1,425 new
condos under construction in metro Victoria are already sold.
"These condos are being marketed long before the start of construction --
sometimes even before site preparation," Prill says.
Developments, such as Dockside Green, commonly market their product on
websites and set up a display suite off-site.
"We build show suites as a test to see how it really looks," says
developer Joe Van Bellegham of Dockside Green. "It's an opportunity to
show (the public) what is differentiating us from the competition."
"I also like to see the actual product. I like to touch and feel it
myself," Van Bellegham says.
There are fringe benefits for buyers who commit to a project in the early
stages. Buying early protects the consumer from rising prices in a hot
market. Buyers are also finding financial institutions offer financing
packages that guarantee mortgages at current rates even if the completion
date is a year and a half in the future.
© Times Colonist (Victoria) 2006
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