The following is an article from the New York Times:
A Canadian Condo Boom
ON a recent Wednesday evening at the downtown Gotham Steakhouse here, about 100 people gathered around an open bar for a party given by Ian Watt, a Century 21 broker, who had invited clients to thank them for buying property in the city.
One of the guests was Annu Gill. With her fiancé, Rick Gill, who coincidentally has the same last name, she bought a 1,200-square-foot condominium at the Sheraton Wall Centre, a 42-story hotel with 74 units in downtown Vancouver. The condo cost one million Canadian dollars, currently worth about $1.03 million.
“When I try to explain to friends in the States how much it costs here, they don’t believe me,” Ms. Gill, 29, who is a real estate broker, said of the city’s high prices. “They say, ‘You’re lying.’”
But $840 a square foot — which is how much the couple paid for their condo — is not unusual these days.
Downtown Vancouver is the most expensive housing market in Canada, according to a survey of 21 cities worldwide released last April by Century 21. The average sales price for a condo in Vancouver was around $419,750 in 2007, up 14.6 percent from last year, according to Royal Le Page Real Estate Services. The average sales price in Toronto, Canada’s largest city, was about $241,818, up 15.7 percent from last year, and in Montreal, $201,818, up 4.6 percent.
The number of homes in Vancouver selling for more than $2 million also rose this year, by 48 percent, according to Re/Max Associates. The higher prices reflect years of price gains of 15 to 20 percent, according to Helmut Pastrick, the chief economist for the Credit Union Central of British Columbia.
Fueling the high-end market are foreign and second-home buyers, he said, though not necessarily from the United States. The weak American dollar, which for the first time in decades is worth less than the Canadian dollar, has been making real estate in Canada more expensive for Americans.
Other foreign buyers make up a significant percentage of the market, according to Ian Gillespie, the president of Westbank Projects. The company is building several residential towers downtown, including the 60-story Living Shangri-La, which will be Vancouver’s tallest building after it is completed in 2009.
“This is a very multicultural city,” said Mr. Gillespie, who cited as an example a pharmaceutical executive from the Middle East, who recently bought a 1,700-square-foot $3.65 million condo at the Fairmont Pacific Rim.
The city’s population has grown substantially as a result. In 2006, there were 36,321 more people living in Vancouver than in 2005, according to Statistics Canada, and 72 percent of the newcomers were immigrants.
It’s not hard to imagine why the city is so appealing: Vancouver has been described as Canada’s version of San Francisco. It has a cosmopolitan feel, yet it is surrounded by mountains and water. The temperate climate attracts retirees, while the vibrant urban lifestyle draws young singles. The economy, supported by forest products, mining and an active film industry, is also growing, thanks in part to the development associated with serving as host of the 2010 winter Olympic Games.
The most expensive condo on the market in downtown Vancouver right now is a 7,000-square-foot waterfront penthouse listed for $18.2 million. The 38-year-old owner, an entrepreneur, said he bought the condo for $3 million four years ago, then sunk millions more into renovations.
Jamie MacDougall, an agent with Sotheby’s International Realty, said that the condo was still considered “cheap” compared with comparable properties in New York or San Francisco. It has been on the market since July.
Although price increases have slowed this year, Vancouver’s housing market is not experiencing a bubble, Mr. Pastrick said. Less aggressive mortgage underwriting practices have helped shield Canada from the credit squeeze that swept through the subprime mortgage market in the United States after the fallout in housing.
Bob Rennie, the president of Rennie Marketing Systems, a real estate marketing company, said Canadians typically put down 20 percent in nonrefundable deposits.
Every crane downtown is sitting over a building that is 75 to 100 percent sold out, with large deposits in place, Mr. Rennie said. “So the consumer is committed, and the developer is not at risk with construction,” he noted. There are about 50 condo towers under construction in the downtown area.
In 2006, Diana Becker, the owner of a culinary tourism company, paid $900,000 for a two-bedroom in the 37-story Jameson House, which is scheduled to open in 2009. Ms. Becker, who now lives on the outskirts of downtown, said she had been attracted to the development’s design. “It feels very Spanish Moroccan,” she said. Ms. Becker says she is also looking forward to being able to walk to her favorite downtown restaurants like Le Crocodile.
Not everybody is enthusiastic about Vancouver’s growth. To make room for some projects, hundreds of single-room-occupancy hotel rooms for low-income residents have been lost, said David Eby, a lawyer with the Pivot Legal Society, a legal advocacy group. High prices are pushing out middle-income renters and buyers, he added.
Gordon Price, the director of the City Program at Simon Fraser University, said the city erred by abandoning its commitment to maintain a 33 percent low-income housing mix in the Southeast False Creek site. The development is being built initially to house athletes during the Olympics. Later, it is to be converted into condominiums and town houses selling for $600,000 to $6 million.
The city reverted to a 20 percent low-income housing mix because of concerns about cost, said Jennifer Young, a city spokeswoman, explaining that there had been a drop in government financing for low-income housing.
Darek Cole, for one, says he feels lucky to afford a home in the city. “Vancouver is a difficult place to get into compared to other cities,” said Mr. Cole, 26, who works for a marketing company. He paid $270,000 for a 600-square-foot condo in the city’s Downtown Eastside neighborhood.
“I knew it would be a good investment,” he said.
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