- What Metro Vancouver has seen a surge of new multifamily assets listed around $30m
- Why Industry insiders say it’s because a fresh wave of new product has come online
- What next The wave could signal good news for the market this year
In recent weeks, Vancouver has seen an increase in multifamily assets hitting the market around the $30m mark, breaking a months-long trend of lower-priced listings.
The fresh wave of product is largely due to completed stock hitting the market, industry experts tell Green Street News.
Cynthia Jagger, executive vice president of capital markets for CBRE, said a gap in rental construction for about 40 years led to Vancouver and other cities offering incentives to build rentals around 15 years ago. Now, a fresh wave of projects is coming to completion.
“Our team has been fortunate to be retained for several significant mandates, and we’ve seen a lot of activity and interest in these large-scale assets,” Jagger said.
An influx of recent completions
Mark Goodman, principal of Goodman Commercial, agreed the timing of development completions is part of the reason assets over $30m are now hitting the market. His brokerage has the assignment for two residential properties in that price range: the 365 Residences in North Vancouver, listed at $33.2m, and a 1-acre parcel approved for development in South Vancouver listed for $30m.
Last week, a building in Grandview-Woodland was listed by Macdonald Commercial for $29.8m. Meanwhile, a 184-unit complex on Renfrew Street in Vancouver was put on the market with Cushman & Wakefield marketing it at a $150m guidance price.
None of these developments were built before 2023.
Goodman said the new builds are now being sold by developers who don’t operate rentals.
“I think it’s a function of simply timing, they just happen to be coming to fruition,” he said. “But I think people have been holding off during this turbulent time in the marketplace.”
Last year saw similar investor hesitation play out. According to Green Street’s Sales Comps Database, in the first two quarters of 2024, just three multifamily buildings sold for more than $30m in Metro Vancouver. In Vancouver proper, 188 East Woodstock Avenue which sold for $38.5m last April.
The other two were both in the neighbouring suburb of Burnaby at 5777 Willingdon Avenue and 4475 Grange Street for $38m and 8350 11thAvenue for $33m. Both sales were last May.
Goodman said it’s difficult to draw any long-term conclusions from the new listings, but the easing of interest rates is also a likely factor. And although there is more product at a higher price point hitting the market, it still represents the minority of product, he added.
Goodman said he expects to see more new builds hitting the market in the next five years as projects are completed.
Spring market plays a role
Adam Herman, an associate broker at Marcus & Millichap who specializes in multifamily assets, said economic uncertainty and Canada’s recent election likely had some impact. But investors are also likely taking advantage of the spring market.
“If people are looking to sell and they want to sell by the end of the year to take advantage of a spring market, which is typically busier, now is the time they would have to get it out,” Herman said. “Our deal transaction timelines tend to be longer than other asset classes.”
Jagger said the sudden surge of pricier multifamily units could signal positive change in the marketplace. But she also cautioned that higher prices can cause some distortion of the market.
“It should bode well, although it’s important to note that these larger transactions can sometimes skew the traditional statistics for multifamily building sales given the average sale price is typically much larger,” she said. “This can impact total dollar volume but also the average price per suite given newer buildings trade at a higher rate.”
