There are certainly risks that come with pre-sales, but for those who are comfortable with those risks and are looking to get into the market, their attention is now likely focused on the Metrotown neighbourhood of Burnaby, where a large group of high-profile projects by big name developers have all recently launched or are set to launch shortly.
That group includes the 66-storey Citizen by Anthem Properties set for 4663 Kingsway, the 38-storey Riviera by Ledingham McAllister set for 4960 Bennett Street, the 35-storey Reign (South Tower) by Wesgroup set for 6280 Willingdon Avenue, the 50-storey Solhouse 6035 by Bosa Properties set for 6035 Wilson Avenue, and the 43-storey Greenhouse by Concord Pacific set for 5895 Barker Avenue.
The five projects are all located within walking distance of the Metropolis at Metrotown shopping centre, as well as each other, and total to just under 1,600 units all hitting the market at the same time. (Shape Properties' City of Lougheed Tower Three, Ledingham McAllister's Icon, and Millennium Development's Etoile Gold can also be added to the pool of Burnaby launches if looking beyond Metrotown.)
All five of these projects have also been on the sidelines for some time, all being first proposed to the City of Burnaby over three years ago, with several being proposed over five years ago.
"For all of them to kind of go at once now, when the market is still a bit uncertain, is a little bit unusual and a little bit surprising," says Suzana Goncalves, EVP of Sales and Marketing for MLA Canada.
Developers have to feel like there is enough demand in the market to hit their pre-sale targets — most often around 60% to 65% — to secure construction financing within 12 months, she adds. However, at some point, developers may decide that they can't keep waiting, or they may have construction teams they want to keep active, or they may want to start recouping their costs.
"Having said that, Anthem is an example of a company that has a lot of depth and a lot of experience, so they tend to roll and continue to be one of the most active developers in the marketplace, even under some uncertain conditions," says Goncalves. "In the case of Wesgroup, they have two towers on their Metrotown site, so there may be motivation to at least get the first tower going and the project underway. In the case of Ledingham McAllister, they actually decided to start construction a couple of years ago, so they are already moving forward with that development one way or another and may have felt like they needed to start recouping costs and time to absorb all their inventory."
Goncalves also points out that there was a sixth project, Metro21 by Shokai, which is set for 6540 Marlborough Avenue, that was originally set to also launch around this time, but has since been delayed to next year.
"As to why they pushed that launch, I can't say for sure," Goncalves says, "but it's very possible that they could've looked at the number of players that were coming into the market all at once, particularly those big names, and felt like it might be better to go in the new year, when maybe they can be the new shiny object and not go head-to-head from a launch perspective."
In terms of price points, Goncalves says prices in the Metrotown area are generally in the range of $1,225 to $1,450 per sq. ft these days — on the medium-to-high range in the context of Metro Vancouver at large. Riviera and Reign are closer to the lower end of that Metrotown spectrum, while Concord and Bosa are closer to the high end of the spectrum.
As to whether there are any precedents for this cluster of launches, Goncalves says there isn't any obvious precedent in Burnaby. Surrey City Centre and West Coquitlam have seen towers competing with one another, but not this amount of inventory all within what is essentially a 15-minute walk from one another.
"Certainly this number of units in a very specific location like Metrotown is a little less common," says Goncalves. There's certainly no precedent, I think, in Burnaby. When I think of neighbourhoods, this is probably the most in a neighbourhood that's so condensed. On the west side of Vancouver you may have a whole host of projects launching, but you haven't necessarily seen that level of activity in just Kerrisdale, for example."
What makes this Metrotown area particularly unique, however, is that there is a decent chance that it sees another wave like this.
Just since June of this year, this same 15-minute radius has seen a three-tower project by Peterson Group and a 33-storey project by OpenForm Properties be proposed. Additionally, Anthem's 34-storey tower on Marlborough Avenue and the multi-tower second phase of Concord Pacific's Metrotown community both also received final approval in recent months, setting the stage for what could become another round of head-to-head competition in the near future.