Season’s Greetings and Market Update
Wishing you all a Merry Christmas, Season’s Greetings and a Happy New Year in 2012!
Video greetings from the lobby at Downtown Suites. Because the lobby has a bit of an echo, the audio might not be so clear on your computer, but you can read the full text here.
I just want to give a quick recap of what’s been going on in our fair city this last year. We’ve had a very strong real estate market for a lot of the year, mainly being driven by offshore Chinese buyers coming from mainland China and driving the price of real estate up. It has made a little bit of controversy in the city because affordability of housing is actually deteriorating. The politicians and the media are struggling with ways to try and resolve this.
Well, the easiest way to resolve it is to increase the supply (this seems to be eluding everybody at the moment.) But create more supply and we will have more affordability obviously.
Essentially, we were slower renting this year than we were last year but now, this holiday season is one of the busiest months we’ve had in several years. Lisa, our leasing manager, has been absolutely rushed off her feet and she’s working all through the holiday season trying to get those suites that are available re-rented as soon as possible. Most suites do rent within 30 days and we very rarely have a vacancy.
Rental rates have gone up, we’re thinking probably about 5% overall over the last year. In the summer they were even higher. But, again, with more supply, more condo buildings coming on stream with vacant units that are hitting the market, the prices have softened a little bit. But we’re still seeing about a 4 or 5% increase over prices of last year in general. This is borne out by the legislation of the Provincial Government, who are now legislating that rents can be raised 4.3% for 2012. As you probably know, we can only raise rents to the maximum that’s set by the Government. We’re not perceiving that to be any kind of a problem. 4.3% will be the rate and that seems to be pretty well in line with actual market conditions.
On the sales side, as I said before it has been fairly strong. We’ve got a lot of product on the market, still do have. With condominiums there’s at least 1000 available right now, resales downtown. We’ve still got a lot of new product coming on stream, particularly on the other side of False Creek, the Olympic Village area, there is a huge amount of building going on there. And around the BC Place Stadium there is projected to be 7000 more people going to be living in that zone alone, as well. So all this will help with affordability.
Plus, of course, we’ve got to maintain our market share because we’re now competing with all the other municipalities. Surrey is definitely open for business, much more affordable. It’s a different kind of tenant out there, but nevertheless Surrey is a very vibrant place and a lot of head offices are moving there. So Vancouver has to maintain its share within the region and drive the market, as it has done for so long.
We’re very enthusiastic and very positive about the new year, which I’m sure is going to be another great year. I would like to again wish you all the very best of the season and hope that next year is as prosperious for you all as this one was. And Good Health! Thank you.
