Burnaby's real estate market is swiftly evolving. Over the past two decades, it has changed from a quiet, more suburban region into its own urban center. This change was not accidental – strategic urban planning, investment in public infrastructure, and a focus on creating a sustainable living environment have made Burnaby an attractive destination for developers and homeowners alike. Now, there's a palpable uptick in presale home launch activity, making Burnaby Metro Vancouver's real estate hotspot for the fall. Both seasoned developers and new market entrants are gearing up for a particularly busy season.
Burnaby’s resurgence: predictions and projects
In the past year, major submarkets within the Lower Mainland have seen limited new project launch activity. A range of factors, including escalating construction costs, lack of market depth related to rising interest rates, and lacklustre price appreciation are responsible for this stagnation. Yet, the narrative in Burnaby is changing. Garde MacDonald, Director of Advisory at MLA Canada shared that industry insiders indicate a surge of activity this fall in Burnaby and Metrotown, specifically. Looming large are six ambitious concrete towers from several developers. Reign by Wesgroup, Solhouse 6035 by Bosa, Greenhouse by Concord Pacific, Icon at Southgate Village by Ledmac, and Riviera on the Park by Ledmac are some of the incoming heavy hitters. Also worth noting is Citizen by Anthem, which began its sales a tad earlier. Combined, these projects will introduce close to 1,800 units to market. However, while they have been preparing for launch, given the current market temperature and the extensive preparation involved it's possible not all will make their debut this season. Take, for example, Metro21 by Shokai Canada: initially set to kick-off sales this month after an August realtor event, they've now recalibrated their strategy to Spring 2024 in response to the influx of competing projects from more established developers.
Smaller developers often strategize around larger players, stalling launches to first view the market's appetite. This cautious approach might lead to price adjustments and enhanced incentives for buyers. For those holding back now, the next significant timeframe to target would be the Chinese New Year in February.
Burnaby's newfound momentum mirrors West Coquitlam's growth in Summer 2022 and Brentwood's ascent before that. Each project, as it garners interest, creates a ripple effect, bringing more attention and potential buyers to the region. Increasing interest breeds fiercer competition, but also creates a mutually beneficial relationship that drives traffic and interest to each other’s projects. Each new development will have a different definition of success and different sales propositions. An example can be found looking at two frontrunners: Reign by Wesgroup and Solhouse 6035 by Bosa. Their geographic proximity sets the stage for comparison. While Reign is projected at around $1,300 PPSF, Solhouse leans towards a loftier $1,450. Reign's 35 stories might seem impressive, but Solhouse soars with 50, promising beautiful views. Solhouse also boasts Lumon balconies, an add-on increasing its prevalence within the Vancouver development community. Wesgroup, however, is known for its aggressive initial pricing, luring buyers early on and balancing out costs with subsequent phases. Another project to look at is Greenhouse by Concord, distinct in its emphasis on boutique luxury, spacious homes, and uniquely designed curved balconies. Such varied strategies, each tailored to tap into specific buyer segments, are critical to serve all demographics and to stand out during a growth spurt.
Zooming out: the greater landscape
Burnaby's overall real estate picture is one of robust growth and resilience. Despite global economic challenges and high interest rates, Burnaby's market shows vitality. Our recent data showcases a 5.5% year-over-year appreciation in condo prices in Burnaby South, compared to Vancouver West’s 3.9% and West Coquitlam’s 4.3%. July saw an 18.3% spike in condo resales compared to the previous year. Looking at Burnaby overall, the benchmark condo value in July was $785,700, marking a 3.0% year-over-year increase and 1.9% increase over the past three months. Areas like Brentwood, with its seven active concrete condo projects, and Metrotown, which houses eight active projects, spotlight Burnaby's power.
Real estate is often intertwined with broader economic indicators. Burnaby’s economic health, infrastructure development, and job market play integral roles in shaping its real estate landscape. The city's emphasis on sustainable development, green spaces, and community-centric projects makes it an appealing locale for long-term investments.
The potential of this market, along with the prospective success of the upcoming launches, ultimately depends on a mix of elements. Releasing the 1,800 new units in phases will mitigate oversupply concerns. Positive economic indicators could further elevate market confidence. As MacDonald notes, "each developer's results will differ. Projects by developers with a strong reputation, combined with effective pricing strategies, like Wesgroup’s Reign, have the power to perform strongly in Q4.” Recent project outcomes support this view. The City of Lougheed's Tower 3 struggled after launch in July, largely because it is completed product, removing one of the main benefits of presales – kicking the mortgage commitment down the field by 3-5 years. In stark contrast, Citizen, which only recently began sales, saw nearly 185 units claimed, a testament to Anthem's loyal industry following and strong reputation – as well as a first-to-market advantage.
The promising prospects of new projects paired with the city's sustained growth indicators point to a compelling future for Burnaby. Developers, both established and emerging, are recognizing the potential of the market, and reflecting that in diverse project strategies. The development activity in the municipality this fall promises a strong future for investors and residents.
