SPECIAL REPORT - FINDING AN AFFORDABLE CONDO Dec. 12, 2009

For the last few months the price momentum for apartment condos has turned positive or soon will turn positive in most Greater Vancouver market areas. This means that the days of finding "deals" will soon be over. This special report examines MLS apartment condo sales over the past six months in an attempt to identify where potential buyers can find "affordable" apartment condos and what they can look for to get most for their money.

As a starter, it's a safe bet that low rise apartment condos will be less expensive than high rise condos and it's also a safe bet that the downtown Vancouver market is the most expensive condo market. For these reasons, this search for affordable condos will look at low rise apartments outside of the downtown area.



A review of average MLS low rise selling prices over the past six months (Jun to Nov/09) shows that the lowest average selling price is found in North Surrey. Langley and Pitt Meadows-Maple Ridge are also less expensive than most other markets but product choice is more limited than in North Surrey. Over the last six months, new MLS listings of low rise apartments averaged 150 units a month. Langley had an average of 71 new listings per month and Pitt Meadows-Maple Ridge, 44 new listings per month.



The selling price of a low rise condo in North surrey is a function of many factors. Unit size is important. Buyers looking for a small condo under 600 square feet will pay around $160,000. Buyers opting for a large condo of over 1,256 square feet will pay an average of $268,000. Demand for smaller low rise apartment condos has been quite strong in North Surrey. At the end of November, there was about 21 weeks supply of active listings in the under 600 square foot range.

Over the past three months (Sept-Nov/09), the average sales price of North Surrey low rise condos was $236/square foot. The average list price was $256/square foot. The difference between sales and list price suggests that sellers still have to be flexible in their pricing to make a sale. In fact, sellers have had to come down by about 5% from their original list price to make a sale in the past few months.

For potential buyers looking for a low rise apartment in North Surrey, a more affordable condo can be found if they are willing to make some "trade-offs".

Trade-offs		save
Age of building	older than 2 yrs	$88/sf
Location	no golf course nearby	$35/sf
Floor	ground floor	$11/sf
Project Amenities	no exercise centre	$27/sf
	no guest suite	$26/sf
	no bike room	$22/sf
	no sauna/steam room	$22/sf
	no club house	$21/sf
Features	vinyl/lino flooring	$21/sf

The biggest savings can be gained by opting to buy in an older rather than a new building (less than two years old). The average price difference between a new and older building is $88 per square foot. For a 900 square foot unit, this works out to a difference of almost $80,000.

It goes without saying that location makes a difference in what a buyer pays for an apartment condo. But in North Surrey, staying well away from golf courses could make a difference of $35/square foot. Being in a central location, near shopping or near recreation seems to have little effect on the selling price.

Most buyers will pay more to be up another floor. Opting for a ground floor location can reduce the price by about $11/square foot. For that 900 square floor unit that would mean a $10,000 price difference. But such savings may be offset by increased insurance premiums.

Project amenities add to the price of a low rise condo in North Surrey. An exercise centre will add an average of $27/square foot to the price. A club house can add and average of $21/square foot. But these price differences are not cumulative. Projects without an exercise centre probably don't have a sauna/steam room either. And older projects tend to have fewer amenities than newer projects so additional savings by forgoing project amenities will likely be minimal.

The only unit feature that makes much of price difference in North Surrey low rise condos is flooring. Hardwood flooring will add about $37/sf to the price. Tile will add an average of $20/sf . Opting for vinyl or lino will reduce the price by an average of $21/sf. Interestingly, unlike many other markets, a fireplace or no fireplace makes little difference to the selling price of low rise condo in North Surrey.

A careful shopper can still find an affordable apartment condo if they want to live in a North Surrey low rise building. The average 900 sf low rise unit in a brand new project is now around $270,000. In an older building the price of that unit drops to $190,000. That building will likely be around 14 years old, away from a golf course and with limited project amenities. Not for everyone, but it is livable and relatively affordable.