High demand coupled with a lack of inventory. Sound familiar? That combination is not just the domain of the residential housing market, but also the multi-residential property market in Vancouver, as investors, big and small look to get a piece of the action.
According to Avison Young’s Fall 2015 BC Multi-Family Investment Report, demand for multi-residential properties in Metro Vancouver and throughout the province remained exceedingly strong in the first half of 2015. Private buyers – both local and foreign – and, to a lesser extent, institutional investors and REITs, were increasingly willing to accept record pricing and highly compressed capitalization rates as the cost of entry to British Columbia’s coveted multi-family real estate market.
Rising rental rates in Vancouver are also proving to be an incentive for investors to secure multi-family assets.
“For the most part, rents in general have not kept up with the rapid rise in the value of multi-family properties in Metro Vancouver,” said Avison Young Principal Rob Greer. “The public’s increasing willingness to rent – due to the difficulties many people are encountering getting into the region’s expensive real estate market – and forego property ownership is pushing many would-be home owners who are able to afford higher rental rates into the market.”
According to the report, multi-family investment activity rebounded in the first half of 2015 with 26 deals (more than $5 million) valued at $370 million compared with 20 transactions totalling $186 million in the back half of 2014. Multifamily investors’ first-half performance in 2015 was on par with the levels of activity in the first half of 2014, which featured 23 deals valued at $396 million. Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage.