It's no secret that Vancouver real estate has been a pretty good buy over the past decade or so. Owning your home in our growing city has brought huge tax free returns, yet not all real estate has provided the same level of return or degree of risk.
The real estate landscape here has changed in a short period of time. Each segment of the market has unique pros and cons that change over time. A big part of why we got into the Vancouver loft business and have made it our specialty is because we know the pros increasingly outweight the cons!
Owning land single family homes has provided the most lucrative return on investment of all real estate in Vancouver. As a result, the city of Vancouver's single family detached average price is well over $2 Million dollars as of 2017. That is because it is in high demand with low supply, which makes it unreachable for the majority.
The high price point also make it more volatile as it is often tied less into our economy and local incomes, and more into global factors like foreign investment or government policy. A market correction of just a few percent can be hundreds of thousands of dollars at thse price points, so it's not for everybody. A prime example is the surprise recent foreign buyers tax, which is having a direct impact on the upper end of the market.
Which means attached homes have become the clear majority. This includes duplexes, townhomes, condos, and lofts! Duplexes and townhomes are the primary option for young families or those in need of 3 bedrooms. With the same supply and demand constraints, the average price of these in the City of Vancouver has hit $1 Million. The advantage with these types of homes is that even though it's shared living, you have more space and therefore own a greater piece of the land the property sits on. The disadvantage can be larger expenses to contend with that come from having more space. Things like higher property taxes, additional utility costs, and less people to share maintenance with.
This is why condos are the popular choice for the average home owner and investor. With an average price of $600,000, ease of renting, and lower operating costs it's the primary option for many.
Condos can prove to be lucrative investments if done right and timed properly. More than 60% of Metro Vancouver's housing stock is condos now and that number is only growing as land is scarce. Which means a greater supply of very similar units to chose from. When supply is high or on par with demand, the ability to be in high demand and score on resale is a little bit harder. Ultimately it will boil down to how unique and well located the property is.
Which brings us to lofts, which are considered condos in a sense but with a number of different features that define what what makes them different. You can go through our helpful breakdown of the different loft styles here. There are only handful of true loft buildings in Vancouver and they don't seem to be making more of them, even as demand grows.
Here is another list of why we love lofts and why they seem to do so well on resale:
1. They offer a lot of space and character for the price. High ceilings, brick walls, and open concept, industrial features give them a lot of curb appeal.
2. Live/work zoning. They were typically designed for small business owners and artists to both live and work from. An increasing viable option as office space gets more expensive.
3. High rents. People LOVE lofts, and if they can't find one to buy they will pay a good amount to rent it, more so than a traditional condo. Covering your monthly expenses with only 20% down is not impossible with a loft.
4. Regardless of the market, demand tends to exceed supply. There are roughly 60 or so true loft buildings in Vancouver and rarely are truly unique lofts for sale. Multiple offers is not uncommon.
5. Average price is still on par with normal condos. On a price per square foot basis, they are similar but still don't have a lot of inventory to compete with like new condos do.
LET US HELP
We get inquiries all the time about what it takes to own a loft in high priced Vancouver. Trust us when we say that it's a great entry point option for investors and first time buyers alike. The nice thing is that if you eventually outgrow your loft and go to sell, you should do just fine on getting a return on your investment.... and then some!
Here are a few of our favourite lofts we have sold recently that are proving to be great investments for their new happy owners: