The future price of condominiums, even in suburban Metro Vancouver markets, can be expected to increase because of escalating prices being paid for land, according to a LandShare survey compiled by Colliers International in Vancouver.
The study found that land values have driven up the price-per-buildable square foot of new condo projects downtown, in Vancouver neighbourhoods and into the suburbs.
In downtown Vancouver, the average high-rise apartment condominium being built or planned will carry a cost of from $190 to $250 per square foot due to land values.
This means that these costs must be recovered before any construction; finishing or marketing costs are factored. For example, a 1,000-square-foot downtown condominium would have a land component value of from $90,000 to $250,000.
In the Chinatown area, the same type of new condo building would have a land component equal to $90 to $175 per square foot.
On the West Side of Vancouver, developers of high-rise concrete condos must factor in an average land value of from $175 to $250 per square foot.
In East Vancouver, where Cressy Developments recently paid nearly $10 million for a 19,820 square foot lot – $167 per buildable square foot – on Joyce Avenue, the average land component of new high-rise condo apartment is now from $100 to $170 per square foot.
In Richmond, the land value component of a new high-rise concrete apartment is from $65 to $100 per square foot, while it averages around $90 in most of Burnaby. Recent land sales show these prices may also increase, however. Intergulf Development Group, for example, paid $20.7 million this year for a 49,397-square foot lot on Nelson Avenue, or about $123 per buildable square foot.
New Westminster is among the most affordable markets, with a land component equal to from $30 to $75 per square foot for a high-rise condo site.
In central Surrey, where Tien Sher Investment Group plans a further 1,200 new high-rise condominiums, the buildable-per-square foot value, based on land prices, is from $18 to $25 per square foot.
However, the LandShare study found that townhouse developers in both South Surrey must now begin with average land prices of from $1.8 million to $2 million per acre.
