You know where they are… at least, you do now. They’re the neighbourhoods that yesterday were discussed quietly, often with a mild disdain — as if nobody who was anybody could possibly consider a home there. Perhaps they suffer from a less-than-savoury past; sometimes it is because they’re so far off the beaten path, no one actually knows where they are. Then, everybody blinks, and suddenly those areas are hot, hot, hot.
Well-known examples include Chinatown, Main Street, Burke Mountain, Surrey and, of course, Yaletown — once a shabby industrial area, now home to some of the priciest real estate in downtown Vancouver.
With some foresight and patience, these emerging areas can offer buyers a golden opportunity to tap into great value now and often amazing returns on investment in the future.
But how to predict the next hot spot? It’s a question that developers spend countless hours pondering — and copying their forecasting methods can provide savvy real estate buyers with a few clues.
Filling the Voids
Like all industry insiders, Manuela Mirecki, Ledingham McAllister’s senior vice-president of marketing and design, stresses that while there’s no magical formula that works time after time, she frequently zeros in on what’s missing in a neighbourhood.
“Fraser Street, for example, had a long tradition of single-family residential and all the bones of a cool neighbourhood, but it was lacking a major grocery store. Century Group introduced that needed retail and added a new mix of housing types — condos and townhomes.”
For consumers, the timing was close to ideal. The Westside’s escalating prices were creating a ripple effect and were already moving eastward past Main Street and just starting to nudge Fraser’s cost price per square foot up — but not very hard. For LedMac, it translated into an opportunity to gain a viable return on their investment while still providing a quality product at an affordable price.
The Geometry of Expansion
“We are fortunate to live in a part of the country that continues to experience significant population growth,” says Geoff Duyker of MOSAIC Homes. “However, then the question becomes where is the required new housing going to go?”
The answer is either “up” through higher density or “out” by moving to the ’burbs — and MOSAIC is actively pursuing both options. With Kitsilano and Point Grey low-rise developments among the many already in their portfolio, the company is now among the first to bring luxury condos to Vancouver’s Cambie Corridor with its Elizabeth project and the recently launched Cambria. The neighbourhood is known for prestigious but land-inefficient single-family homes and has been suffering from a need for high-density, transit-oriented yet luxury housing, which MOSIAC is hoping to address with these two new projects.
Growing outward, according to Duyker, means identifying areas just beyond where people have historically migrated. That’s why he believes Willoughby, Clayton and Burke Mountain — a neighbourhood he describes as the next Westwood Plateau — are successful.
He’s also keeping a close watch on Tsawwassen. “Development in Tsawwassen has been stagnant for many year, but with a regional destination mall now under construction and some exciting deals being worked out with the First Nations, it’s going to change rapidly.”
Masterminds at Work
Insiders remain virtually unanimous that masterplanned communities, especially ones located on or near transit, will retain their spot as solid, easy-to-identify potential growth areas. The combination of residential, retail, services, and in many cases, entertainment is proving irresistible to a diverse range of buyers who benefit from the economy of scale as well as the opportunity to be involved in a dynamic, lively community.
“For developers, it’s also easier to create something amazing when we’re envisioning an entire community rather than one or two towers in isolation,” says Nic Jensen, vice-president of sales with Onni.
“As the community develops and more amenities arrive, early buyers reap the benefits of rising property values.”
He cites the success of Victoria Hill (New Westminster) and Suter Brook Village (Port Moody) as two favourite examples.
Duyker agrees. “Watching the pieces come together in a development like Fremont Blue [in Port Coquitlam] is exciting because you can see the changes as they happen. Key indicators like some retail today with more coming and homes already under construction send a clear message that ultimately this will be a great place to live.”
Proposed transit is another major influencing factor in future livability — the under-construction Evergreen Line, for example, is set to make a string of neighbourhoods in Port Moody and Coquitlam instantly more desirable when the Skytrain line opens in 2016.
Bob Rennie, Vancouver’s often outspoken Condo King, is frequently quoted as saying “if you want to know where the next hot spot will be, keep your eye on the artists and prostitutes, because wherever they go will be the next area of change.”
While it may be a less-than-scientific evaluation, there’s no question many emerging neighbourhoods enjoy an undeniable “funk factor.” There’s an edginess to them that creates an appealing, unique ambiance. Often they’re centres of creativity and off-the-grid thinking with a lively cultural base of hip new bars, pop-up art galleries and so on.
So if you’re looking for the next hot spot, just keep an eye out for what’s cool…
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Until next time,