The accelerated growth in construction costs has significantly pushed condo prices upward in Vancouver, according to findings by Altus Group.
Although the tightened B-20 stress tests have contributed to more moderate demand in Canada’s hottest property markets, Altus Group has estimated that 210,000 new homes and 300 million sq. ft. of new commercial/industrial space across the country will still begin construction in 2019.
Last year alone, the national construction sector saw $87 billion in residential developments and $53 billion in commercial/industrial projects, Western Investor reported.
An acre in Vancouver allotted for a high-density residential project is worth as much as $40 million. Taking into account these land values, the city’s per-buildable-square-foot cost for high-rise residential housing stood at $325 this year. For comparison, this far outstrips the cost in other popular condo markets like Toronto ($225), Winnipeg ($60), and Edmonton ($50).
Together, these factors have elevated the average value of a new high-density condo unit in Vancouver to $1,345/sq. ft., growing by 39% annually.
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However, these strong numbers paint only part of the market’s picture, as low sales and notable price declines are predominant in Vancouver at present, according to figures from the Real Estate Board of Greater Vancouver.
Benchmark prices for all residential property types fell by 6.1% year-over-year in February, reaching $1,016,600. Detached homes experienced the greatest shrinkage at 9.7% (down to $1,443,100), while townhouse values decreased by 3.3% during the same time frame (down to $789,300).
Overall residential sales declined by 32.8% annually last month, ending up at 42.5% below the 10-year February sales average, BNN Bloomberg reported.