FIFTH DIMENSION THE. First Quarter A comprehensive analysis of the multifamily real estate market in Metropolitan Vancouver.

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1 THE FIFTH DIMENSION First Quarter 2017 A comprehensive analysis of the multifamily real estate market in Metropolitan Vancouver May 2017 DATA PROVIDED BY:

2 WELCOME TO THE FIFTH DIMENSION Fifth Avenue Real Estate Marketing Limited, a full service, residential real estate sales and project marketing organization with over 36 years of experience, is pleased to supply you with this complimentary edition of the Fifth Dimension. To ensure the supporting data for this First Quarter 2017 edition is objectively collected and presented, we collaborate with highly regarded Urban Analytics (UA) a leading provider of advisory services on the new multifamily home market. UA has been tracking the new multifamily home market in Metropolitan Vancouver since 1994 and has been a vital contributor to this report since its inception in the First Quarter of The older I get the more I realize the importance of being careful with the words I speak or write. I am also becoming increasingly aware of my distaste for misplaced hyperbole. Don t get me wrong; I appreciate it as a literary device. Paul Bunyan, WH Auden and William Shakespeare understood it and its use, but when did hyperbole become a primary communication tool for leaders? For a case in point look at the leader of the free world who resides south of our border. Recently, he decided to part ways with the head of the FBI. Here is what he had to say in an NBC interview regarding this controversial matter, He s a showboat, he s a grandstander You know that and I know that. Everybody (in Washington) knows that. I guess there is only room for one grandstander or showboat in Washington. Everybody knows that. Count the number of times he does this or something like this. He may possibly be the greatest hyperbolist on the planet. Why do I bring this up? In this edition of the Fifth Dimension we want to avoid being accused of hyperbole when we raise what we believe to be a very real concern - the lack of supply in our market. Of course, we are mindful of our biases in favor of more supply. Just because we would like more product to sell doesn t necessarily mean we do not have a supply issue in Metro Vancouver. Does it? How about a number of supporting facts and observations on the matter? Did you know that: Inventory levels are down 59 percent compared to the eight-year average (basically the timeframe we have been producing this report). There were only 31 units of completed inventory yet to be sold in the Metro Vancouver area at the end of the First Quarter. This is an all time new low. Buying pre-sale is basically a norm/requirement now. Even with a 53 percent increase in the number of active projects compared to the Fourth Quarter of 2016, inventory levels dropped by approximately 1,400 units compared to the levels recorded at the end of the Fourth Quarter of While sales are down this quarter compared to the prior quarter and the record quarter last year, compared to 2015, levels sales are within five percent of the total posted in the same quarter that year. At that time, an approximate 4,000 units sold mark was considered to be good. Consumers in a number of suburban markets are willing to/have to line up to buy a townhome or new condominium. Our aim in sharing this view is simple; we want to encourage a deeper level of inquiry into the matter and a greater public discourse. We also want to be sensitive to how the consumer is treated in these market conditions. Now if it is determined to be in the public s best interest to accelerate supply, let s get on with it in an expedient and appropriate manner. Feel free to share this report and your perspective on what is presented here as widely as you see fit. Our aim is to stimulate dialogue and promote positive action in our industry. Regards, This reminds me of what one of my buddies used to say, Just because you are paranoid doesn t mean someone isn t after you. It also does not deny the very real possibility that the lack of supply is a meaningful contributor to the ongoing challenge of affordability in this market. W. SCOTT BROWN PRESIDENT & CEO FIFTH AVENUE REAL ESTATE MARKETING LTD. SCOTT@FIFTHAVE.CA PAGE 1

3 TABLE OF CONTENTS Welcome to the Fifth Dimension...1 Overall Market Summary... 3 Market Summaries Vancouver Downtown... 4 Vancouver West... 5 Vancouver East...6 Richmond & South Delta...7 Burnaby & New Westminster...8 North Shore: North & West Vancouver...9 Tri-Cities: Coquitlam, Port Coquitlam, Port Moody...10 Ridge Meadows: Maple Ridge & Pitt Meadows...11 Surrey Central & North Delta...12 South Surrey & White Rock...13 Cloverdale & Langley...14 Abbotsford Looking Back and Ahead Research Methodology...17 PAGE 2

4 OVERALL MARKET SUMMARY In this first edition of the Fifth Dimension for 2017, our data collection and analysis partner Urban Analytics (UA) shares its commentary on the recent quarter, market performance year to date and what to expect in the upcoming quarter with respect to Metro Vancouver s multifamily residential real estate market. Q1 New Home Market Overall First Quarter sales activity in Metro Vancouver s new multifamily housing market declined moderately due in part to a lack of new project launches in the region. levels remain an issue. In addition, inclement weather conditions in January/February, along with development approval delays suppressed sales and inventory levels somewhat in the First Quarter. All that aside, there was a total of 3,884 new multifamily home sales reported in the First Quarter. This figure is down 11 percent from the last quarter and 38 percent from the record high total recorded in the First Quarter of In spite of lower activity relative to previous quarters, the overall First Quarter sales were still up 13 percent compared to the eight-year average of First Quarter sales. There were 2,546 released and unsold new multifamily units in Metro Vancouver recorded at the end of the First Quarter; down 25 percent compared to the same quarter last year, and down a staggering 59 percent compared to the eight-year average of released inventory at the end of the First Quarter. There were only 31 completed and unsold new multifamily homes available to purchase at the end of the First Quarter, which once again reestablishes a new all-time low. The sector recorded the weakest relative sales activity in the First Quarter. This is largely due to the fact that no new projects launched in significant markets such as Burnaby, New Westminster, North Vancouver or Surrey City Centre. There were only 1,844 sales recorded in the First Quarter, which is down 43 percent from last quarter, and down 48 percent compared to the same quarter last year. In spite of the lack of new launches, strong sales activity occurred at Downtown Vancouver projects Boffo s The Smithe and Westbank s Alberni. In Vancouver West Pure West Property s Contessa on Cambie and Polygon s Eton projects sold a combined total of 188 units in the First Quarter. Other significant sales occurred at Wesgroup s Avalon 2 (Vancouver East), Concord Pacific s Concord Gardens South (Richmond) and Polygon s Mantyla (Coquitlam). It is important to note that the lack of new project launches has resulted in there being only 1,437 released and unsold units of this product form. This figure is down 71 percent from the same quarter in Stronger sales were recorded in the sector in the First Quarter of The total of 1,239 Condominium sales in the First Quarter was up 33 percent compared to the eight-year First Quarter average. There were 459 released and unsold Condominium units at the end of the First Quarter, which is down 34 percent compared to the same quarter last year. Notable sales activity occurred at recently launched projects Wynsgroup s Spark (Richmond), Fairborne Homes Kindred (North Vancouver), Polygon s Juniper (North Vancouver) and Regency Development s The Five Points (North Vancouver), Porte s Domain & HQ (Surrey City Centre), Quadra Homes Yorkson Downs (Langley), RDG Management s The Wex (Langley), and Infinity Properties The Belmont at Heritage (Langley). This sector also experienced significant price appreciation in a number of areas including Surrey and Langley. The sector was reasonably strong with 801 sales recorded in the First Quarter of This figure is down 37 percent from the same quarter last year but is still in line with the eight year First Quarter average. Notable sales activity occurred at Dawson & Sawyer s Old School and Guildford the Great II (South Surrey and Central Surrey), Mosaic s Kitchner (South Surrey) and Vesta Properties Lattice at Milner Heights (Langley). Q1 Resale Market There were 2,552 newer multifamily homes resold in the First Quarter of 2017; this is up just under 20 percent relative to last quarter, but down 24 percent when compared to the same quarter in Both the total number of active listings and sales compared to this quarter last year have decreased by 25 and 24 percent. Every sector saw a decline in sales when compared to the same quarter last year; re-sales for, and product have declined by 25, 8 and 36 percent, respectively. Although active listings overall have declined this quarter relative to First Quarter of 2016, the sector saw an increase of six percent. Q1 Observation and Opinions The most prominent story in Metro Vancouver s new housing market is the lack of available product which has, in turn, resulted in decreased affordability across the region. We do not see this trend reversing anytime soon, as the projected demand for new housing continues to outpace the projected supply of new Condominium and product. The lack of affordability has also resulted in purchasers seeking more affordable locations and product forms. For example, the First Quarter new home sales in the Fraser Valley represented 31 percent of overall new home sales in Metro Vancouver, up from the 23 percent recorded in the First Quarter of Sales activity for wood frame Condominium developments has been especially strong in all Metro Vancouver locations, as prospective purchasers are increasingly becoming priced out of s and/or concrete Condominiums. Projects anticipated to launch in the Second Quarter of 2017 include: In Downtown Vancouver Marcon s Mirabel, Asia Standard s Landmark and PortLiving s Terrace House; in Burnaby Townline s Sussex, Thind Properties Lumina, and Belford Properties Sun Towers; in Richmond Aspac s River Green Phase II, Yuanheng s ViewStar, and ifortune s Glitz; in Coquitlam Polygon s Stanton House and Marcon s 562 Living; in North Vancouver Wanson s Brooklynn; in Surrey/White Rock Landmark Premier Properties Foster Martin, Bosa Properties Miramar Village Phase 2 and Texor s Beachborough; and in Central Surrey Tangerine Developments The Guildford and Concord Pacific s Park Boulevard at Park Place. New Home Market YTD Comparison YTD 2015 Sales YTD 2016 Sales YTD 2017 Sales % Change from ,227 3,544 1,844-48% 973 1,419 1,239-13% s 878 1, % Total 4,078 6,227 3,884-38% New Home Aggregates Q s Total Total Q Sales 1,844 1, ,884 Total Inventory 1, ,550 Standing Inventory Total # of Projects First Quarter Resale Activity s Total Total Sales 1, , ,299 PAGE 3

5 VANCOUVER - DOWNTOWN Strong absorption of recently launched product continues to afford Downtown Vancouver a Green Light rating. Three new projects were brought to market in the first quarter of 2017: Boffo Developments The Smithe, Westbank s Alberni, and Onni s 1335 Howe. In spite of record-setting per square foot values, 288 of the 386 units released through this project were reported sold in the quarter. Concord Pacific s The Arc and Bosa Properties Cardero both reportedly sold their final homes in First Quarter of Larger unit sizes and historically high values of these newly recent developments attracted both local downsizer buyers and some overseas buyers at projects like Westbank s Alberni, where units were averaging an estimated $2,500 per square foot. Westbank s Alberni has sold a reported 171 of 180 units in its first quarter of sales. The Smithe reported 90 of 94 units sold at an estimated per square foot value of $1,500. The projects larger floorplans have attracted a majority of the downsizer demographic. Onni commenced sales at its 1335 Howe and is estimated to be averaging $1,750 a foot. The developer is affording purchasers the opportunity to combine homes for larger living spaces. Asia Standard America Group is anticipated to launch its 237 unit Landmark on Robson late Spring Mirabel by Marcon located in the West End neighbourhood is anticipated to launch late Spring/early Summer Projects Sales Unsold Inventory $1,150 - $2,500 This quarter's months of supply decreased to 1.2 from 1.8 last quarter. The average price per square foot value increased by $147 to $1,023 when compared to the same quarter last year. The number of resales this quarter have decreased by 20 percent to 80 listings compared to the same quarter last year. The average per square foot values for 1 and 2 bedroom units increased by $165 and $116 yearover-year. Sold # % DOM % $1, $520,000 - $960,000 Average Price Average Price $620,962 $1,037 $879,037 $999 PAGE 4

6 VANCOUVER - WEST The Green Light rating continues in the Vancouver West market as absorptions remain strong across all sectors. High rrse sales accounted for 87 percent of total new multifamily sales in the First Quarter of Sales in this sector have experienced a decrease relative to last quarter due to the limited new product brought to market: only three projects launched in the quarter which added 200 additional units of available inventory. Both the and sectors reported an increase in sales versus last quarter. Note, however, that for s, this remained very low with only seven sales over the quarter. and unsold inventory of product continues to fall, with eight units remaining across Vancouver West due to no new project launches. Three new concrete projects launched over the quarter: Henry by Homei Properties, Contessa on Cambie by Pure West Investments, and The Grey by Westland. Concrete product in Vancouver West has seen a new maximum of $1,780 per square foot due to the launch of Westland s The Grey in the Dunbar area. Two projects launched this quarter which are both located in the Cambie Corridor: Yukon Residences by Alabaster Homes and Tudor House by Formwerks which increased the maximum estimated price per square foot to $1,215. Although sales for Condominiums and s have increased relative to the Fourth Quarter of 2016, sales for these sectors are still down relative to the same quarter last year: by 66 and 68 percent, respectively. Edward by Mosaic Homes launched and sold out over the quarter, marking a monthly absorption of 52 units at a new maximum price per square foot of $951 for wood frame Condominiums in this market. Two Concrete Condominiums are expected to come to market in The Second Quarter of 2017: Cambie62 by GD Omni Investments and The Stanton by Landmark Developments. Projects Sales Unsold Inventory * $868 - $1, $806 - $ $961 - $1,215 *Note: denotes concrete product which accounts for The Grey project being included in this active sales range. The total number of resales are similar to the same quarter last year. However, the total number of listings have gone up by 80 percent relative to the same quarter last year. The average sale value per square foot for High and units have increased substantially when compared to last year: by $141 and $113, respectively. The average sale value per square foot for s has increased the least relative to last year, with an increase of $47. The average sale price for a 1 bedroom unit in a High and, is up $165 and $105, respectively. The average sale price for a 2 bedroom unit in a High and, is up $109 and $120, respectively. Sold # % DOM % $ $423,000 - $763, % $ $375,000 - $731, % $783 9 $621,000 - $1,164,500 Average Price Average Price $502,249 $868 $741,148 $872 $442,390 $730 $655,920 $766 $879,500 $830 $1,076,425 $753 PAGE 5

7 VANCOUVER - EAST The Vancouver East market retains its Green Light rating as inventory levels for all product types remain extremely low, while absorptions for newly launched product continued to have strong absorptions. Concrete Condominium sales increased with Wesgroup s Avalon II launching over the quarter at its River District master planned community. Avalon II accounted for 222 of the 224 concrete condominium sales in the First Quarter of s experienced a slight increase in sales with five more sales being reported compared to the previous quarter. Epix townhome project 16 Brownstones reported three sales during the quarter and is scheduled to move into a completed display suite in the Second Quarter of Bold Properties wood frame project Synchro launched in the First Quarter of The project is achieving an average of $1,028 per square foot with 25 of 29 units sold. Four projects sold out this quarter which included: projects Arne by Mondevo, Hanna by Alpha Beta Developments, along with Portliving s wood frame project Midtown Modern, and Wesgroup s concrete condominium project Quartet Chorus. Vancouver East market reported zero units of standing inventory at the end of the quarter. Unsold inventory at the end of the First Quarter of 2017 is 11 percent higher when compared to the same quarter in Tatla Developments Slocan Park and Vicini Homes Ward are anticipated to launch in Second Quarter of Projects Sales Unsold Inventory $650 - $900* $550 - $750* $750 - $950* *Note: The greater variation in active Sales Price Range is the result of the achievable sale value differential between comparable product in the different East Vancouver neighbourhoods. Months of supply increased by 0.4, 1.0 and 2.0, for,, and product relative to a year ago. Average square foot values have increased by over $100 across product types relative to the same quarter last year.,, and re-sale average sales values are up $138, $124 and $117, respectively. The total listings in the First Quarter of 2017, were down 34 percent when compared to the same quarter last year. The average square foot values for one and two bedroom units, for High and Product have all increased by at least $120 relative to the same quarter last year. Sold # % DOM % $ $476,000 - $1,146, % $ $562,500 - $1,038, % $ $775,000 - $1,146,000 Average Price Average Price $599,398 $995 $919,597 $1,001 $592,274 $868 $847,316 $918 $983,667 $942 PAGE 6

8 RICHMOND & SOUTH DELTA The Richmond/South Delta market continues to receive its Green Light after an increase in sales across all product types. The Wood Frame sector experienced a 48 percent sales increase compared to the previous quarter. Sales growth in this sector can be attributed to the launch of Spark by Wynsgroup, selling out all 135 units within the project. The concrete condominium sector recorded the only increase in available inventory with the launch of Concord s Concord Gardens - South Estates, adding a total of 180 released units to the market. This project represented an estimated 52 percent of concrete condominium sales in this market during the First Quarter of Dava Developments launched Parc Belvedere near the end of the quarter and sold 34 out of their 52 released homes. Overall Richmond/South Delta s year-to-date sales were 20 percent lower when compared to 2016, with concrete condominiums seeing the greatest change in 2017 with a 31 percent decrease in total sales. Reduction in sales for all product types can be attributed to the lack of new project launches in Townline sold the final 26 units at it s The Gardens-Calla project. Dava Developments sold the final 35 homes at its wood frame project Monaco at Parc Riviera. Polygon s Fairwinds at Hampton Cove achieved the strongest absorption for product with 40 sales out of the 50 remaining units. Ora by Onni and Quintet II by Sunrise Berhad each sold out during the quarter. Townline Homes is anticipated to launch Dahlia in Spring 2017, the sequel project to The Gardens- Calla. projects anticipated to launch in the second quarter of 2017 include Centro West by Centro Properties Group, Vogue II by Landcraft Homes and Preston by Jacken Investments. Projects Sales Unsold Inventory * $650 - $ $550 - $ $650 - $770 *Note: denotes concrete product which accounts for The Grey project being included in this active sales range. Months of supply for both and product decrease relative to the same quarter last year, by 2.0 and 0.4 months. Months of supply for s, however, have increased by 1.2 months when compared to last year. Both the total number of listings and resales this quarter have decreased substantially from the same quarter in The average price per square foot values for all product types have increased year-over-year. Average price per square foot values have increased for product by $108, by $127 and s by $94, respectively. The average sale price of a 2 bedroom unit increased by just over $169,000 over the year. Sold # % DOM % $ $401,000 - $775, % $ $366,000 - $600, % $ $718,000 - $949,000 Average Price Average Price $444,816 $695 $632,690 $708 $377,921 $613 $532,751 $606 $739,200 $671 $818,036 $616 PAGE 7

9 BURNABY & NEW WESTMINSTER The Burnaby/New Westminster market maintains its Green Light rating as demand continued for all product types combined with a lack of new product launches. Burnaby/New Westminster experienced an 82 percent decrease in sales compared to the Fourth Quarter of This can be attributed to five less actively selling projects and the successful launch of Anthem s Station Square IV and V, and Shape Properties City of Lougheed. s were the only sector that saw an increase in unsold inventory with New Metro Vancouver Holdings releasing its second phase of The River located in Queensborough. Two wood frame projects sold out over the quarter, Citimark s Modena and Crystal View Development s Saxon Living. Millennium Development s Triomphe reported the highest absorption in the First Quarter of 2017 with 97 units sold. The project is achieving a blended average of $790 per square foot. Ledingham McAllister s Escala sold its final units over the quarter. Polygon Homes project Veritas-South continued strong absorptions with 23 sales over the quarter. Sales have been on hold for Shape Properties first tower of its master-planned community City of Lougheed, after launching it in the Fourth Quarter of Concord Pacific s Concord Brentwood Hillside West which is comprised of 892 units between two towers reported 90 percent sold at the end of the First Quarter of 2017 Polygon Homes Fulton House reported five units remaining at the end of the quarter. Three concrete condominiums are set to launch in the Second Quarter of 2017: Belford s Sun Towers, THIND Properties Lumina Brentwood, and Townline s Sussex tower. Projects Sales Unsold Inventory $430 - $ $462 - $ $483 - $627 for all product types in the First Quarter of 2017 have remained similar to the same quarter last year. However, the total number of resales have decreased by 76 percent over the same time period. All average product values have increased compared to the same quarter last year: by $117, $88 and $73, respectively. All average product values have increased compared to last year: by $117, $88 and $73, respectively. The average price of a two-bed unit has increased by just over $100,000. Sold # % DOM % $ $425,000 - $778, % $ $332,000 - $535, % $ $515,000 - $910,000 Average Price Average Price $461,873 $745 $639,495 $685 $364,970 $574 $491,381 $566 $543,500 $572 $748,000 $566 PAGE 8

10 NORTH SHORE The North Shore market retains its Green Light due to strong demand for all housing types in the First Quarter of Three new low rise buildings were brought to market in the quarter: Polygon s Juniper, Fairborne Homes Kindred, and The Five Points by Regency Development. As there was zero inventory available for the purchase of this product type at the end of the Fourth Quarter of 2016, pent up demand contributed to 173 of the 207 units at these projects being absorbed within days of being brought to market. Downsizers continued to drive sales at Bosa Developments concrete condominium project Residences at Lynn Valley, where 68 sales at its development accounted for nearly 42 percent of the total sales in the quarter. Located in the Lynn Valley neighbourhood, Juniper by Polygon reported 40 of 68 units sold in the quarter at an estimated average per square foot value of $694. Kindred by Fairborne Homes successfully sold out both buildings in its initial quarter of sales; the 95 units averaged an estimated value of $720 per square foot in the Moodyville neighbourhood. Despite record-setting price points for concrete condominium product, Grosvenor s Ambleside II and Cressey s Bellevue reported 9 and 12 new sales respectively in this quarter. Development representatives at The Five Points indicated that the project had over 1,400 registrants for the 44 unit building, indicating strong demand for this product type. Projects Sales Unsold Inventory $647 - $2,400* $556** $610 - $1,141 *Note: The greater variation in active Sales Price Range for high rise is the result of the achievable sale value differential between product in North Vancouver vs. West Vancouver. ** Note: No range is provided for low-rise condominiums as only 1 project is actively selling. Compared to this quarter last year, both the number of active listings and re-sales have decreased substantially: by 77 percent and 81% percent respectively. Average prices per square foot across product types have increased across product types versus this quarter last year: by $133 for high rises, $99 for low-rises, and $114 for townhomes. Months of supply for both and s have increased year-over-year: 1.7 and 1.4, respectively. However, the months of supply for Low-Rises has decreased by 0.4 compared to Q The average price of two bedroom s have increased substantially, by $195,662 compared to last year. However, the average price of three bedroom s have experienced a $43,500 decrease over the same time frame: the only unit type to see a drop since the same quarter last year. Sold # % DOM % $ $501,000 - $990, % $ $455,000 - $795, % $ $652,000 - $989,000 Average Price Average Price $533,306 $856 $925,048 $940 $477,027 $705 $687,288 $732 $862,100 $723 $874,450 $662 PAGE 9

11 TRI-CITIES The Tri-Cities market remains at a Green Light rating as strong demand for all product types continues into the First Quarter of A 40 percent decline in sales versus last quarter in the concrete condominium sector is attributed to a low supply of available inventory; 35 units remain unsold at the end of the First Quarter of The wood frame condominium sector also experienced a decrease in sales of 19 percent relative to the Fourth Quarter of Unsold inventory at the end of the First Quarter of 2017 is partly a result of two product launches near the end of the quarter and one project priced at a new high in Port Coquitlam. The only sector to experience an increase in sales volume was the sector due to the positive response to the launch of Whisper by Gardenia Homes. 15 of 36 units brought to market were sold over the quarter, marking a 64 percent increase relative to the Fourth Quarter of As a result, unsold townhome inventory remains low in the Tri-Cities, with 26 units remaining by the end of the First Quarter of Launched within the quarter, Polygon s Mantyla concrete tower reported 125 sales by the end of the First Quarter of 2017, representing the highest absorption in the Tri-Cities market at an estimated $630 per square foot. In addition to being 98 percent of concrete Condominium inventory in Coquitlam Center, strong demand observed in this project was partly attributed to buyers unable to purchase in previous phases of Polygon s Windsor Gate community. Three wood frame Condominiums launched in the First Quarter of 2017 which are all concentrated in Port Coquitlam: The Arden by Fairwind Homes, Parc East by Atlas Global Developments, and Lumiere by Saturn Construction. These brought 142 units to market of which 48 percent sold within the quarter. Four projects sold out in the First Quarter of 2017: The Crown by Beedie, Uptown Pointe by Pacific New Homes, Parker House (West Building) by Polygon, and Erika townhomes by Gardenia Homes. Overall inventory for the Tri-Cities market continues its decline with a 57 percent drop relative to the same quarter last year. Initially anticipated to launch in the First Quarter of 2017, 567 Clark + Como by Marcon is expected to launch in early May. Projects Sales Unsold Inventory $510 - $ $463 - $ $386 - $610 *Note: The greater variation in active Sales Price Range is the result of the achievable sale value differential between comparable product in Port Coquitlam vs. Coquitlam and Port Moody. Both total listings and resales were down, by 14 percent and 32 percent, respectively. Average per square foot values have fallen across product types: s by $112, by $94 and s by $47. Months of supply have increased for both High Rises and s: 0.2 and 1.5, respectively. Months of supply for product has decreased by 0.4 versus this quarter last year. Sold # % DOM % $ $389,880 - $635, % $ $320,000 - $519, % $ $555,000 - $850,000 Average Price Average Price $394,353 $641 $557,174 $607 $336,025 $516 $468,853 $498 $554,624 $444 $720,170 $486 PAGE 10

12 RIDGE MEADOWS The Ridge-Meadows market retains its Green Light rating as both wood frame Condominium and sales experienced strong absorptions over the quarter, while available inventory continues to decline. Despite no new project launches in the wood frame Condominium sector, sales rose significantly with 118 reported in the First Quarter of This is an over six and a half time increase relative to the Fourth Quarter in One exception to this trend is a wood frame project in Pitt Meadows (The Orion by Bellmont Group) which sold 11 units over the quarter and contributes to 57 percent of all unsold inventory. inventory is being readily absorbed with 28 units remaining unsold by the end of the First Quarter of This number is higher than anticipated as 22 units are a result of Archstone Rockridge being released in the last two weeks of the quarter. UA anticipates this inventory to be absorbed quickly. Wood frame Condominium sales were concentrated between two projects in Maple Ridge: Edge on Edge 2 by MacLean Homes and The 222 by ML Properties. 98 of 118 wood frame Condominium sales were reported between these two buildings. Only one new project was launched in the Ridge-Meadows market this quarter, with all available inventory located in Maple Ridge. Archstone Rockridge by Archstone released 37 s in late March, with 15 sales reported within two weeks at an estimated $303 per square foot. This project offered unique two-bedroom townhome plans which were popular amongst early buyers. The project has subsequently sold 59 of the 61 homes. Oaken Development s Ruxton Village released the remainder of their inventory, bringing 20 units to market and reporting 20 sold over the quarter. Overall, this marks 57 new units brought to market of which 35 were sold by the end of the quarter. Inventory continues to remain low, with 28 available units remaining by the end of the First Quarter of Two new projects are anticipated to be brought to market in the Second Quarter of 2017 Kanaka Hill by Quarry Rock Developments and Ridgemont townhomes by Nordel Developments. Projects Sales Unsold Inventory $349 - $ $274 - $326 The total number of listings compared to the same quarter last year has decreased by 35%, while the total number of resales has remained unchanged. The average per square foot value for and townhome product has increased by $85 and $54 relative to the same quarter last year, respectively. Sales were essentially split 50/50 between low rise and townhomes. The average days on market for and s have decreased by 50 days compared to the same quarter last year. The average per square foot value for a 2 bedroom unit has increased the most across unit types: by $91 compared to last year. Sold # % DOM % $ $274,900 - $440, % $ $229,900- $399, % $ $429,999 - $605,000 Average Price Average Price $274,900 $425 $440,000 $456 $239,700 $344 $359,454 $367 $440,036 $366 $497,941 $315 PAGE 11

13 SURREY CENTRAL & NORTH DELTA The Surrey Central/North Delta market retains its Green Light rating due to continued strong demand for all product types in the First Quarter of The majority of sales in the concrete and wood frame sector were driven by both investors and firsttime buyers, as reported by various sales centre staff. Investors seeking attractive price points for concrete product in Metro Vancouver comprised majority of the 46 sales at Weststone s Evolve project. The launch of Porte s final two buildings at its HQ community in Surrey Centre contributed to the 102 percent increase in wood frame sales relative to the previous quarter. Though two new projects were brought to market in the First Quarter of 2017, released and unsold inventory continued to dwindle as robust demand for townhome product remains evident. Porte s HQ wood frame condominium development in Surrey Centre comprised project comprised 91 percent of the overall sales for this product type in the quarter. Average per square foot values for the final building Dwell is an estimated $398, up $47 from the first phase release of Thrive, which was brought to market in November Guilford the Great II sold all 38 homes in the quarter at an estimated per square foot value of $366. Concrete condominium inventory continued to dwindle over the quarter with only 57 unsold units now remaining in the entire market. It is anticipated that Concord Pacific will be commencing sales of its next building Park Boulevard in the Second Quarter of 2017 at price north of $600 per square foot. Projects Sales Unsold Inventory $450- $ $375 - $ $300 - $365 Months of supply has decreased substantially for and product versus this quarter last year: a drop from 8.6 to 2.5, and 6.4 to 1.5 months. respectively. Overall sales were almost evenly distributed across product types this quarter. The average per square foot values have increased product types compared to the same quarter last year: $129 for, $82 for, and $72 for s. The average days on market across product types has decreased substantially from last year, experiencing a 200 percent decline. One bedroom average unit prices have increased the most across unit types. They are up $142 compared to the same quarter last year. Sold # % DOM % $ $240,500 - $371, % $ $201,000 - $357, % $ $444,900 - $594,000 Average Price Average Price $279,777 $515 $358,015 $458 $232,781 $380 $315,994 $369 $409,258 $354 $518,564 $343 PAGE 12

14 SOUTH SURREY AND WHITE ROCK The South Surrey/White Rock market maintains its Green Light, as townhome sales were strong over the quarter along with steady sales from the low rise sector. Although sales in the wood frame Condominium sector have decreased relative to last quarter, this is due to a decrease in available inventory as no new product has launched. Four projects released new phases of development this quarter which was quickly absorbed by the market. The sector experienced a 57 percent increase in sales compared to the previous quarter, showing a continued demand for product in this market. Sales representatives noted buyers have been from Richmond, Vancouver, and South Surrey. A decrease in unsold inventory for this market can be attributed to there being no new project launches in the First Quarter of Mosaic s Kitchner project experienced the highest absorptions in the First Quarter of 2017 with 94 units sold. Zenterra s project SOHO reported strong sales since moving into a completed display suite. The project is achieving $417 per square foot with 16 new sales in the First Quarter of Adera s South Ridge Club Grandview which was put on hold is anticipated to re-launch in the Second Quarter of Polygon s second phase of its Prescott Commons project continued to experience strong absorptions reporting to be 85 percent sold at the end of the quarter. 42 sales occurred at the two actively selling wood frame projects, with 37 taking place at Polygon s Prescott Commons II which averaged $462 per square foot. Projects Sales Unsold Inventory $385 - $ $323 - $460 Months of supply for High and product has dropped relative to the First Quarter of 2016: down by 1.0 and 1.2 months, respectively. Overall resales were down 27 percent relative to last year, but the total number of listings have remained similar. The average per square foot values for and product have increased by $87 and $72, respectively. product per square foot values have increased by a smaller amount - only up $18 since last year. Days on market decreased significantly for only low rise product: from 77 to 25 days relative to the same quarter last year. Both 1 bed and 2 bed units have increased by the highest average per square foot values, $91, relative to last year. Sold # % DOM % $ $330,000 - $890, % $ $324,888 - $505, % $ $488,000 - $741,000 Average Price Average Price $393,617 $529 $635,536 $579 $307,581 $462 $420,800 $468 $578,716 $402 $576,449 $391 PAGE 13

15 CLOVERDALE & LANGLEY The Langley/Cloverdale -market retains a Green Light rating due to increased sales and decreased inventory relative to the previous quarter. First-time buyers, move-up buyers and downsizers were all active in the market in the quarter. Increasing prices in the sector has contributed to the stronger demand for wood frame product from first-time buyers. The Wexley by RDG Management sold 48 homes in the quarter. Sales staff indicated that majority of the demand could be attributed to first-time buyers looking to enter the market. Additionally, downsizer demand for larger wood frame () homes remained robust with Quadra Homes reportedly selling all 136 homes in one day at its newest launch Yorkson Downs. Quadra Homes' Yorkson Downs sold out on its first day of sales at an estimated per square foot value of $392; The project comprised 56 percent of the total sales in the quarter. Nearly half the remaining supply is located in Langley City at Whitetail Homes Ltd project Benjamin. Next to the 24 units of inventory recorded at the end of the Second Quarter of 2016, First Quarter of 2017 s 46 units of unsold supply marks the second lowest quarter of available supply in the past seven years. Although no new projects were brought to market in the quarter, overall absorption increased by 56 percent relative to the previous quarter. Move-up buyers looking for more space for their young families were reported to be the most active in the sector, as reported by various sales centre staff. Landstone Homes Zetter Place and Streetside Developments Everly Green were both reported sold out in the quarter. Projects Sales Unsold Inventory $390 - $ $270 - $375 Months of supply for both and product have decreased since the same quarter last year: 1.5 and 1.2 months, respectively. Total listings have increased by 36 percent yearover-year while total resales have decreased by 9 percent. Both and average per square values increased by just over $70 relative to the same quarter last year. The average days on market have decreased substantially by 68 percent for product when compared to last year. The average two bedroom unit has increased by $97 per square foot when compared to the same quarter last year. Sold # % DOM % $ $237,500 - $471, % $ $425,000 - $579,000 Average Price Average Price $253,284 $383 $368,833 $381 $432,290 $371 $524,483 $333 PAGE 14

16 ABBOTSFORD The Abbotsford market retains its Green Light rating due to an increase in absorption for both and wood frame product, along with the lack of new product launches. Sales for product increased by 357 percent in First Quarter of 2017 compared to the previous quarter. sales experienced strong absorptions with 28 sales reported in the First Quarter of 2017, compared to the four sales reported in the Fourth Quarter of No new projects were brought to market during the quarter and only one new wood frame building was released. unsold inventory decreased 51 percent compared to the previous quarter. Out of the four actively selling projects in the market there are 27 units available for sale. Affordable & wood frame product continues to attract both first-time buyer and downsizer prospects from Abbotsford and various parts of the Fraser Valley. Sales staff also noted an increase in local Chinese investors purchasing in this market. Strong demand and limited supply have raised prices for both product types. North Hills Development s Vantage at Whatcom sold its final unit in the First Quarter of 2017 and is now sold out. Onni s Allwood Place reported the strongest townhome absorption in this market with 13 units sold. Heinrichs Developments project Mill District launched in the First Quarter of Project is achieving an average of $375 per square foot with 20 units sold at the end of the quarter. Developer has released 41 of 82 units at Mill District. Quantum Properties sold four units and has 40 homes remaining at its concrete Mahogany. Boulevard Group's The Residences at Gateway experienced a strong quarter selling 13 homes at approximately $380 per square foot. Projects Sales Unsold Inventory $ $375-$ $335-$355 Total listings have decreased by almost half, while total resales have remained relatively similar to last year. The average price per square foot and product have both increased, at $75 and $65 when compared to the same quarter last year. The average days of inventory have decreased substantially for both and s to 84 percent and 56 percent, respectively. sales accounted for 65 percent of total sales this quarter, from 75 percent last quarter. Sold # % DOM % $ $180,000 -$319, % $ $359,900 - $505,000 Average Price Average Price $198,423 $304 $291,670 $290 $380,100 $308 $427,877 $283 PAGE 15

17 LOOKING BACK AND AHEAD This quarter the lack of supply is the central focus. First Quarter performance nearly resumed the trend of new multifamily quarterly sales surpassing the 4,000+ mark. Weather was in part a factor to the decline from this time last year, but a lack of inventory to meet demand is the primary story. Thus multifamily development remains a sustained green light rated opportunity in each and every market area within the Metro Vancouver market. Looking Back At the conclusion of the Fourth Quarter 2016 edition of the Fifth Dimension, we shared a positive outlook tempered moderately by supply issues and the forth coming provincial election. Thus we conservatively projected an annual sales total for 2017 that may not surpass the high water mark posted in We did project a greater annual figure for 2017 than that posted in The First Quarter results align with this longer-term projection. We did provide a caution that slower timing of developmental approvals could impair sales and create issues for consumers in terms of affordability and confidence, if the reason for the year-over-year declines is not appropriately interpreted. We did anticipate supply being an issue, however, it may very well be becoming the principal issue this year. We also expected a close election campaign to introduce uncertainty and slow sales in the weeks leading up to May 9th. That never materialized and will be expounded upon in our mid-year edition of this report. We commented that affordability challenges will continue to drive many home shoppers to suburban markets including Surrey and Langley. This has certainly occurred and is also the case in Port Coquitlam and Maple Ridge. It is also affecting sales in out of town markets such as Kelowna. Looking Ahead Demand remains strong and is expected to be sustained throughout the year. will remain an issue. It is in our opinion that a growing population, an aging population re-thinking its housing needs, parental deposit assistance and younger buyers with very different dreams and expectations with respect to housing are key demand drivers. In contrast, constrained supply levels are likely to continue to result in price escalation and enhanced challenges with respect to affordability in the Metro Vancouver market. We do project a mid-year total that will set up 2017 to be one of the best years for sales since 2010 when we started this report. However, it is highly unlikely it will surpass the 20,000+ units sold mark achieved in You can t sell what you don t have. What Is On Our Minds As We Approach the Mid-point of another year? As we approach the mid-point of 2017 we continue to closely monitor the market and the timing of new launches. Given the apparent lack of supply in the market, the seemingly escalating protectionist rhetoric south of the border and the uncertain outcome of the May 9th elections, there are a number of questions that are at the top of our minds at Fifth Avenue. These include: When will we know the outcome of the election? What effect will the eventual outcome have in the short-term and long-term on the new multifamily market in Metro Vancouver? A near un-precedented outcome at the polls has our province waiting to learn of the final outcome and pondering what will happen next. While a redemptive event for the pollsters, the rest of us wait like nervous Stanley Cup Playoff fans awaiting the outcome of a critical scoring play under review. Will the Green s be the most sought after dance partner at the Grad Dance? Will the Liberals squeak out a majority? Will John Horgan become the 36th Premier of BC? Do we find ourselves at the polls again in 12 to 18 months? Will the near Metro Vancouver area-wide escalation of condominium prices that has continued since the outset of 2017 be a year long story? This time last year, the townhome market saw a rapid escalation in average prices throughout the Metro Vancouver area and particularly in areas such as Surrey, Langley and Maple Ridge. These gains were slowed by in part by broader government interventions in the Third Quarter. These gains have, however, subsequently been sustained with additional increases in select areas. It seems like déjà vu this year with the exception that it is now the condominium market that is on the rise. It is in our opinion that this is largely due to three factors increasing construction costs, ongoing challenges securing development approvals in a timely manner and growing demand and more mainstream acceptance of multifamily living. Will this pricing trend continue on a sustained basis or is it akin to the much chagrined and somewhat short-lived gas price hike that occurs each Long Weekend? Is there a sufficient level of supply to meet demand? Second Quarter market performance could easily be impaired by a lack of supply. We do foresee at least 4,000 new multifamily homes being sold between April 1st and June 30th, How much more could be sold if more product could be brought into the market? Is there enough supply to breach the 5,000 sales mark? Clearly, we can not match the staggering midpoint total in 2016 of approximately 13,000 units. Enough product has not been created and offered to do so. Why? If you have a view you would like to share and/or questions you would like to discuss please contact scott@fifthave.ca. PAGE 16

18 RESEARCH METHODOLOGY Urban Analytics (UA) is Metropolitan Vancouver s leading source for analytical interpretation of relevant real estate market data, trends and strategic recommendations. Urban Analytics Inc. (UA) has been retained by Fifth Avenue Real Estate Marketing Ltd. to provide aggregate data on the multifamily residential real estate market in the Vancouver Metropolitan. The methodology used to collect the data was as follows: General Parameters Metropolitan Vancouver refers to the area from West Vancouver to Aldergrove. The focus of this study is limited to the multifamily market. Multifamily Project Data New Home Sales The primary method used to collect information is a personal visit to each project being actively marketed. In addition to collecting current sales information, UA representatives engage on-site sales staff to determine additional relevant information such as incentive offerings, traffic trends and active buyer profiles. In all instances, active sales range quoted in tables is defined as The per square foot sales range in which 75 percent of sales of this product type occurred. Why UA? Urban Analytics has been tracking the new multi-family home market in Metro Vancouver and beyond since In addition to providing clients with our web-based New Home Source data subscription product at nhslive.ca, Vancouver, Calgary and Edmonton s most current and comprehensive data provider of active and contemplated new Condominium and projects, UA is the leading provider of advisory services on the new multi-family home market. UA is also now tracking data on the newer purpose-built rental data so let us know you are interested in learning more. Need help with planning and/or positioning your next project? We can help. Want an unbiased, arm s length opinion of the optimum unit mix and size for a contemplated project and what that product should sell for? Give us a call. Care to have us sit in on a strategy meeting or envisioning session? Not only will we be there, we might even bring some donuts. Anyone who knows us knows we love to talk real estate. Let s chat about how we can help you with your project or set you up with a subscription to the New Home Source at nhslive.ca. For the purposes of this publication, UA contacts various municipal planning departments along with developers (and/or their representatives) of proposed new developments to determine the anticipated timing of their approval and marketing launch. Multifamily Project Data Resale The resale market provides an important barometer from which to assess demand and determine pricing for new home projects. Accordingly, UA closely monitors the resale market for multifamily homes in order to identify trends that are relevant to the new home sector. However, the breadth and depth of product for sale can create findings that are less than helpful to the new home developer. As a result, UA recommends studying only product that is aged ten years or newer and valued at less than $1.2 million. While it could be argued that limiting the analysis to newer product (i.e. five years or newer) would be more relevant to the new home sector, we believe this would limit the sample size and potentially skew the data towards a specific type of product available in a small number of specific buildings/projects. In all instances active sales range quoted in tables is defined as The active sales range in which 75 percent of sales of this product type occurred. (604) Michael Ferreira Principal Urban Analytics Inc. michael@urbananalytics.ca Jon Bennest Principal Urban Analytics Inc. jon@urbananalytics.ca PAGE 17