ULI BC was pleased to host a diverse group of professionals from Vancouver’s real estate community who assessed and debated key findings from the Emerging Trends 2017 Report® last week on November 16, 2016. Susan MacLaurin, Executive Vice President, GWL Realty Advisors moderated the panel that included Tim Grant, Vice President, PCI Developments Corp.; Brian Jackson, former General Manager, Planning, City of Vancouver; Jon Ramscar, Senior Vice President, JLL; and Andrew Warren, Director, PwC.
The post event survey, undertaken jointly by ULI and PwC, asked 900 respondents to describe 2017 real estate. Top key words included competitive, measured, uncertainty and overheated. Survey results suggest that underwriting criteria may be more rigorous in 2017 and that technology (contracting techniques, access to labour resulting from telecommuting), energy prices (oil and gas woes) and housing affordability (specifically, Vancouver’s high housing price to income ratio) are the overriding issues and the prominent interests of respondents.
Generally, respondants see a strong profitability outlook although lenders may be under increasing pressure. Overall, as a result of global economic and political uncertainty the speed at which deals get done is expected to slow down. The property type outlook remains similar to past years with industrial properties remaining popular, specifically, local fulfillment distribution centres and links to retail supply chain. Expected best bets in 2017 includes seniors orientated options in the residential sector.
Vancouver was ranked number one out of nine markets in Canada, with positive macro perspectives despite increasingly micro market considerations. Granular markets (niche sub-sectors) are also increasingly important. When asked if investors understand Vancouver and its economy, the panel agreed the City is regarded as a safe haven but is a small market in the international scheme and its diversity is not widely understood. Generally, real estate trends follow world city economies, more than broader and generalized national economies. Having said that, the impact of the USA election and Brexit means that Canada, especially Vancouver and Toronto, is more attractive than ever.
The prevelance of high quality development in Vancouver is expected to produce better public spaces and community amenities, creating even higher values. However, the panel agreed there is a general misunderstanding by public about where growth is coming from. Brian Jackson made the prudent comment that ‘developers respond to demand and population growth, they are not the cause of it’.
The theme of mixed-use-done-well emerged. The panel agreed that this means increased importance on building communities and improving integration of multi-use land and building forms in complex projects. Detroit was given as an example of a place that is pioneering development and entrepreneurial spirit. The term ‘surban’ was introduced to describe mixed use communities on transit in suburban settings outside of the core.
To accommodate the next 1 million people to the Metro Vancouver region, requires meaningful advance planning in order to maintain high quality of growth. While the Broadway corridor offers intensification opportunities, other areas of opportunity include Translink’s Oakridge Bus Barn site, the RCMP site at Cambie and 33 Ave and Jericho Lands.
The Velvet Rope dilemma was a debate to mean that populism and NIMBY’ism is on the rise. While people say they support the idea of social housing, the reality is much different. In order to overcome community opposition, municipalitiesneed to do a better job explaining the positives of thoughtful, planned and coordinated densification and intensification.
Is the Narwhal Canada’s answer to the unicorn? A Narwhal is a high tech business with capital over $1B. Three exist in Vancouver currently and the question was debated as to how employers are responding to attract andretain talent. Narwhal employees seek rental housing and the municipalities needs to increase housing options andamenities in order to make the region competitive for attracting appropriate talent.
Based on the report, Toronto and Vancouver are expected to rise in similarity to world-class cities like New York, Paris, and London. Implying that renting will become the norm here. Therefore, more rental housing is needed above the 100 affordable housing homes that the City of Vancouver had been approving each year. There is a need to build additional infrastructure and amenities concurrently or in advance of development, not afterward.
In conclusion, the level of dialog around social planning, urban planning and design is greater in Vancouver than in other cities. Because of land constraint, the City and region accepted urban high density development much earlier than in other places. The City’s communication systems need to be responsive in order to contact millennials who need to participate by doing more than tweeting. Our younger generation should have a voice to show support for new density and housing, rather than just older established generations who are generally opposed to change.
Photos from the afternoon’s session are available on ULI BC’s Facebook page. Please also feel free to download a copy of Andy’s presentation and an electronic version of the report – both available on our website here.
Above post-event summary written by:
Patti Glass, ULI BC Communications Chair (Grosvenor), and
Eric Aderneck, ULI BC Past Member (Metro Vancouver)