BRINGING UP HAPPY, HEALTHY KIDS IN
As seen in New Home & Condo Guide
Written by Stephanie Macdonald
February 20 – March 6 edition
In many places, raising your family in an apartment is pretty much a given. Highly livable urban environments like Hong Kong, New York and Paris have many larger apartments where families live and thrive. Metro Vancouver, being newer, is a bit behind the curve. But good urban planning is providing more places for families to fit into the urban environment, because cities benefit from families, and, it turns out, there are lots of benefits to raising children in an urban milieu as well.
In terms of the environment, concentrating human activities in one place significantly reduces our carbon footprint, and encouraging people to live downtown reduces pollution, lowers energy consumption and counteracts urban sprawl.
Millennials take their place powering the property market
By Kerry Gold
Published February 26, 2021
Berkeley Loh, 29, and Tom Holmes, 35, have been together a few years and living in their 800-square-foot Olympic Village rental, but they always had a plan to buy. They’d seen friends and family members buying properties, and they had a fear of missing out.
“You feel behind or something, I think that has something to do with it,” said Ms. Loh, who works as a project manager for clothing company Aritzia. “Our group of friends and family, everyone is buying. We never felt like we were not going to buy. It just seemed like the next thing to do.”
Adds Mr. Holmes: “We have never bought into the fact that the millennials will be renting forever. We’d hear these things like, ‘They aren’t going to own cars — they’ll just rent cars.’ No, we want property and we want a Tesla.”
In the past year, in the midst of the pandemic, Ms. Loh and Mr. Holmes became part a trend: millennial-age people driving the property market. They put a deposit on a 1,136-sq.-ft., two-bedroom condo with a large balcony at 50 Electronic Ave. in Port Moody, with a price tag of $819,000. Among the building amenities is an office space shared among the owners, which has become a bit of a must in the new pandemic world.
They quickly discovered many others in their circle of acquaintances looking to make the leap to home ownership.
Ms. Loh has three millennial age colleagues from Aritzia also buying condos, and another colleague who’s planning on starting a family recently purchased an empty property in Port Moody with plans to build a house. Another friend has bought a rundown house and is going through renovations.
“We have three or four friends who are moving out there,” Ms. Loh said.
Millennials may not be quite so shut out of the property market as has been reported over the past few years. The cohort, whose age range is somewhere between late 20s to early 40s, is entering a phase of life where they are settling down and thinking about kids. Real estate industry observers in the Vancouver area say that millennials have been driving a super hot real estate market. The onset of the pandemic could have seen the market move in the opposite direction. Instead, within months the market picked up steam. The Real Estate Board of Greater Vancouver recently released statistics showing that January, 2021, saw a 52.1-per-cent increase in the region’s home sales over January, 2020.
Like generations before them, millennials appear to believe in home ownership. In April, 2020, Zolo, a B.C.-based digital real estate company and brokerage that collects data on the market, surveyed 2,128 respondents. It found that 16 per cent of people aged 25 to 39 planned on buying a home in 2020, and 26 per cent planned on buying in the next two to three years. Only 15 per cent of that age group said they never plan on buying property. The survey also showed that 59 per cent of millennials had been saving for a home prior to the pandemic, while 51 per cent of the older Gen-X demographic had been saving for a property purchase.
Romana King, director of content for Zolo, said that millennials have been driving the market for several years. Their chief reasons for buying are less financial than psychological, such as wanting stability and permanence. During the pandemic, there’s been a “flight to safety” psychology at play for many buyers.
“Millennials have consistently been driving the engine, whether we recognize it or not, and not for the reasons we always assume,” she says. “I think there has been a lot of, maybe, rhetoric, or a lot of communication, about how millennials are shut out of the market, and I don’t think that’s untrue, but I think that millennials have been creative about their buying.
“A couple of decades ago, my parents or my grandparents might have decided to buy a suburban home because it was more affordable, and that is not an option for millennials. But I know millennials who have purchased a rental property and they rent it out and they live closer to work, and they rent themselves.
“Or they purchased a vacation property because they want the cottage lifestyle, and they know it’s cheaper to purchase that, and they can get a mortgage on a vacation property now. And then they rent in the city.
“So there are a lot of creative ways that millennials have become property owners, it’s just not in a stereotypical way. It’s not a family home in the suburbs, slash urban home … that provides a lot of context to what we have seen in our surveys.
“We have done surveys for the last several years, and consistently we find that millennials are always in the market — which makes sense, because first-time buyers drive the market.”
Backing up the assertion that millennials are driving the market is a recent Royal LePage quarterly house price survey for the end of 2020, which showed median price increases of more than 10 per cent for two-storey houses in 64 per cent of all regions they’d surveyed in Canada.
Randy Ryalls, general manager for Royal LePage Sterling Realty in Port Moody, has said millennial age buyers have emerged as the biggest demographic in the housing marketplace in Canada.
The demographic is at an age where they are earning good incomes and are tired of paying $2,500 or so for rent.
“They are moving into the marketplace in significant numbers,” Mr. Ryalls said. “They are probably buying a condo or a townhouse, although, that said, some of them are buying a $900,000 or $1-million house further out, a decent house with a suite in the basement as a mortgage helper.”
Andy Yan, director of the city program at Simon Fraser University, said the rate of ownership within the demographic hasn’t changed much over the decades. However, he says what has changed is the type of housing that they buy, based on price and location. Historically low interest rates are also playing a major role in their decisions. He cited census figures from 1991 to 2016 that looked at residents in charge of shelter costs for the household, also known as household maintainers.
“There have always been people in that age group jumping into the market,” Mr. Yan said. “In 1991, 36 per cent of 25- to 34-year-old primary household maintainers were owners compared with 39 per cent in 2016.
“However, these numbers do not account for those who are financially sidelined and still can’t enter the field as owner or renter.”
Mr. Holmes says his friends in London are also buying; however, they’re buying in the city’s outer regions instead of the central core.
More space played a big role in their decision on where to buy, says Ms. Loh, who was raised in Vancouver but didn’t want to live in the 500-sq.-ft. of condo that her brother purchased downtown. They’d outgrown their Olympic Village rental and working at home convinced them they needed more space, says Mr. Holmes, a self-employed creative director from Britain.
Mr. Holmes says that because they haven’t been able to travel for the past year, it has helped them save for their down payment. But Ms. Loh says she has been saving her entire working life to buy a property. Mr. Holmes, who has lived in London and Dubai, hadn’t saved as much, so he got help from family for the deposit. They want to pay as much toward their down payment as possible before their condo completes in 2022. As Mr. Ryalls says, it’s relatively easy to service the debt on a condo, especially with low interest rates.
“We always said when we were renting from the start that it would be great if our money wasn’t going into this black hole,” Ms. Loh says. “We were just waiting for the right time to have enough saved.”
Our Presentation Centre will be closed for the Holidays from December 18th – January 4th. We will be available by appointment during this time.
Happy holidays from all of us at Panatch Group and 50 Electronic Avenue! We hope you have a safe, healthy and happy holiday season. It has been a challenging year and now more than ever, we are thankful for the continuous support of our community. This year, Phase 1 of 50 Electronic Avenue sold out and, Phase 2 is over 75% sold with less than 60 homes remaining.
Developer Kush Panatch has helped drive a new type of ownership model that, in a small but meaningful way, is helping people buy into the market – particularly if it continues to catch on with the development community.
He sold 30 of the 358 units at 50 Electronic Ave. in Port Moody, B.C., as part of a rent-to-own (RTO) program, whereby purchasers agree to pay below-market rent for two years until the sale of their unit completes. After two years, a small deposit and all the rent they’ve paid goes towards their down payment. Mr. Panatch kept the rents lower than market, at $1,000 for a one-bedroom and $1,250 for a two- bedroom unit.
The RTO units aren’t any different from the other units in quality or price. While other buyers in the two-building complex paid 15 to 20 per cent of the purchase price as a deposit, the RTO buyers paid $5,000 upfront and will pay another $5,000 once they move in. If the buyers can’t complete on the sale after two years, they are refunded their deposit and the developer takes over ownership.
Mr. Panatch, president of Richmond-based Panatch Group, and his daughter. Eshleen, and son, Aman, millennials who “understood the pain” of the market better than he did, came up with the idea two years ago, while going through rezoning of the 3.5-acre industrial property he purchased two decades ago, before SkyTrain arrived. Port Moody city council was very sensitive to residents being pushed out of the market, he says, and were asking him to consider adding rental units. After talking to a local firefighter who said he felt like the market was a moving train that would never stop to let him on, they came up with the RTO model.
“By the time [first-time buyers] collect another $20,000 or $30,000 thousand in savings, sometimes the market has moved up $20,000 or $30,000, so two years later, they are no further ahead,” Mr. Panatch says.
The rent money will be held in trust by a law firm. The purchase price was agreed upon when contracts were signed, and Vancity credit union has stepped up to help buyers with mortgage financing.
The challenges for Mr. Panatch included the legal expense of drafting a complicated agreement, as well as having to cover some costs, such as strata fees and taxes. Also, developers typically qualify for financing based on deposits from presales, which is trickier with RTO purchasing.
“This was a bit of a painful process – not many programs like this have been done,” Mr. Panatch says.
He also put into place requirements to keep investors from exploiting the program. Buyers had to already live or work in Port Moody and they had to be the end-users for the units they were buying. The names of the applicants had to be the same names that would complete the purchase, to avoid any flipping. He also asked for written notes explaining why they wanted to buy in. Mr. Panatch received more than 500 applications and 200 written notes, which he keeps in a box on his credenza. Mr. Panatch says his family came from Africa when he was 15, and his father worked hard selling truck tires for 30 years, and so he sympathizes with people trying to get a leg up.
“I sound like a typical developer, but … I read all the letters, hundreds of them, and I have to tell you, it’s really hard not to shed a couple of tears in seeing the hardship of some people and how challenging it’s been for them to try to break into the marketplace.”
Mr. Panatch said he feels like he’s at the forefront of a way of business that’s slowly taking hold. He’s thinking of applying the program to a future project in Richmond. He is running a profit-making business, however, and so he’s hoping that the provincial government might help with low- interest rate financing programs that reduce construction costs, for example. As well, it’s good business to appeal to buyers at large, and city councils.
Another upcoming project in Port Moody has also made rent-to-own part of its affordability program, at 3000 Henry St., which includes 17 RTO units as part of a 173-home development. The developer for that project is Vancouver- based Aultrust Development.
Mr. Panatch gave a speech to the Urban Development Institute about his RTO program, which resulted in several developers seeking him out for tips on how to do it.
One of those developers was Kevin Falcon, executive vice- president for Anthem Capital Corp., who spent 12 years in government, including his former role as minister of finance and deputy premier, back in 2011.
Anthem Properties has applied to the district of North Vancouver to redevelop Seymour Estates at 904-944 Lytton St., a former townhouse complex built in 1969. The new development will have 341 units and include townhouses, 89 market and below market rental apartments and 25 RTO homes. It went to a public hearing on Nov. 17, where he says it was met with favourable response.
Mr. Falcon hopes that their novel approach appeals to the need for more diverse housing options in the largely single- family home district. He was taken aback to receive more than 600 enquiries for the RTO units.
“It’s almost shocking, the level of response … and they are not all just young couples trying to buy their first place.
Many are individuals that have been renting in the district for well over 35 years, and want to have the opportunity to own.”
He gives Mr. Panatch credit for the idea. “He was kind enough to share his experience with it and what worked and what didn’t. And so we took that kernel of a great idea and proceeded to bring it forward for our own project,” Mr. Falcon says.
“It’s important to say it’s not a panacea for every project,” he adds. “We did it because we felt it would be a way that we could increase the appeal of the project in the community, by providing an opportunity for first-time buyers.”
The rents will be closer to market rents for the neighbourhood, which are about $1,650 for a one bedroom, and the money would be put aside in an interest-bearing trust account. Purchasers will be responsible for strata fees and property taxes.
Anthem required that the buyers are first-time buyers who plan to live in the unit. They must also be permanent residents or Canadian citizens.
“In other words, it’s not open to people who want to have an investment property or what have you,” Mr. Falcon says. “Those are the requirements we’ve put in place to ensure we have as fair a process as possible.”
“I think a lot of developers would be concerned about the financial impact of having to defer a significant portion of revenue – in our case 25 homes, for two years out. That’s probably the biggest barrier. But if it represented just a modest amount of new projects’ inventory, then who knows. It could be the partial solution towards some of the housing challenges.”
As seen in New Home + Condo Guide written by Stephanie MacDonald November 14-28 edition
Some people just want a place to spend 15 minutes on an exercise bike, or be able to catch some rays on a rooftop deck; and some desire a heli-pad and a robotic car elevator – we all have our differences in what we’re looking for (and willing to pay for) in condo amenities. With a competitive condo market, many developers are going over-the-top with the number and imagination of the amenity packages they are offering. These can really add to your health and quality of life, but they also add to your monthly strata fees, so it’s important to balance what you will use and what you can afford.
In Port Moody, 50 Electronic Avenue is setting a high bar with their dedicated three-storey clubhouse, Club 50, offering over 9,000 square feet of spectacular amenities including a fitness facility, peaceful yoga studio, dog wash room, bicycle repair room, and workshop on the first level.
On Thursday, October 15th, we had the pleasure of welcoming Krissy Vann from CTV News to our Presentation Centre to discuss the growing community here at 50 Electronic Avenue. If you didn’t catch it on the live news we invite you to watch the three segments that she did with us here.
SEGMENT #1 – KUSH PANATCH – The Development
SEGMENT #2 – ESHLEEN PANATCH & AMAN PANATCH – The Port Moody Lifestyle