Metro Vancouver l Fraser Valley Land Assembly & Real Estate Update
(April 25, 2015
)
Our real estate team grew up with and were naturals at Monopoly. Trying to buy adjacent properties of the same colour so you could build and collect higher rent came as natural as breathing to us. That's actually playing out in real life in Metro Vancouver.
Known as land assembly sales, multiple homes next to each other are being sold together as one package. The deals are attractive to developers and incredibly lucrative for homeowners.
Known as land assembly sales, multiple homes next to each other are being sold together as one package. The deals are attractive to developers and incredibly lucrative for homeowners.
Driving it all are the City of Vancouver's plans to re-zone single family lots into high-density residences like condos and townhouses along the city's main arteries. While our real estate team are not fan's of this process in many of our fabulous, historic and peaceful tree lined neighbourhoods we realize many buyers will never be able to purchase a detached home in the city of Vancouver let alone afford the taxes. The trickle down economics are of course leading to the "rise of the burbs" as our forecasting and reports have been stating for decades.
So in certain communities with a density allowance, a 10,000 sq.-ft. house could all of a sudden be turned into 25,000 sq. ft. of new townhomes, explains Robert Pybus of The BC Home Hunter Group (BCHH) which makes a tidy parcel of properties quite attractive to developers.
Vancouver land assembly deals, recently resulted in the sale of nine lots in a row on Granville Street. The $33.4-million deal meant each home — appraised separately at about $1.7 million — ended up selling for an average $3.7 million. Almost everyone is aware that buyers are nearly exclusively Asian, offshore or developers.
There are dozens of land assembly packages listed, including one for 11 properties on Oak Street. The $34-million offering could net each homeowner roughly $3.1 million on an average assessed property of $1.24 million.
But while selling in numbers can be money in the bank, land assembly sales can be a risky business. After the deal is made, sellers could be forced to wait at least a year or two while re-zoning plans make their way through the city's approval process.
During that time, homeowners could change their minds and try to back out. Some developers sweeten the deal by allowing residents to live rent-free during the re-zoning wait, or by adding a $100,000 payment.
Devlopers are snapping up land assemblies without waiting for details from the city on density in the area — such as in the Granville Street sale — which has people like city planner Brian Jackson worried about speculation.
A land assembly also does not discriminate between old homes, completely renovated ones, or new builds. They all get torn down in the end, which some point out only creates more waste out of perfectly livable residences.
All industry insiders predict the land packages will only continue in both pace and price.
During that time, homeowners could change their minds and try to back out. Some developers sweeten the deal by allowing residents to live rent-free during the re-zoning wait, or by adding a $100,000 payment.
Devlopers are snapping up land assemblies without waiting for details from the city on density in the area — such as in the Granville Street sale — which has people like city planner Brian Jackson worried about speculation.
A land assembly also does not discriminate between old homes, completely renovated ones, or new builds. They all get torn down in the end, which some point out only creates more waste out of perfectly livable residences.
All industry insiders predict the land packages will only continue in both pace and price.
Anyone can sell a condo but our team have decades of development, construction, land assembly, sub dividing, agriculturual, mixed use, multi family success and experience. Don't hesitate to contact us with any of your questions and our complimentary home and property evaluation, 604-767-6736.
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