Speakers at a housing forum in Surrey last week, sponsored by the Urban Development Institute, brought a measure of common sense to the often-overheated rhetoric about housing prices in Metro Vancouver.
They brought detailed data to show the real estate markets in Vancouver, Richmond and the North Shore are very different from those in Surrey, Delta and Langley. In addition, they pointed out that in Surrey, there are actually three different markets.
Neighbourhoods are important in real estate sales, and in the case of South Surrey and White Rock, the speakers suggested that, real estate-wise, the peninsula has more in common with the Vancouver and Richmond markets than it does with the rest of Surrey.
“South Surrey really behaves to me more like the west side of Vancouver than it does the Fraser Valley,” said Scott Brown, president of Fifth Avenue Real Estate Marketing.
Meanwhile, throughout the Fraser Valley Real Estate Board area, which includes Surrey, North Delta, Langley, Abbotsford and Mission, the price of townhouses and condominium apartments has actually fallen since 2008. Only the price of detached homes is rising.
That’s perhaps the most significant point. In Surrey and North Delta, there is one market for detached homes, no matter what size the lot, and another for multi-family units. The gap between the two has risen from $200,000 in 2009 to between $300,000 and $400,000 today. It continues to widen.
When considering the differences between the South Surrey marketplace and other areas of Surrey, there are three different markets for buyers and sellers.
Some areas of North Surrey don’t command the same prices as in other parts of the city. While the size and age of the home are important, so is the street, the proximity to schools, transit and other public services, and the general reputation of the neighbourhood.
For example, with the negative publicity about Newton, it is likely prices there have not risen to the same degree as they have in some other communities.
As far as multi-family units go, Surrey has seen a huge number of townhouses and apartments built in the past decade. This type of unit appeals to first-time buyers and is increasingly becoming popular with families.
The added density serves another purpose, from the city’s perspective. Surrey needs to bulk up on density in order to get improved transit service, a significant deficit.
The growing price gap between multi-family and detached housing units should not be that surprising. Ever since the Agricultural Land Reserve (ALR) was created in 1972, there have been significant limits on land available for urban development in Metro Vancouver and the Fraser Valley.
Up until recent years, there has been enough supply available, with the biggest supply of those available lands in Surrey. That has changed.
Much of Surrey has now been developed and the city is either preparing or contemplating development plans for much of the rest of the area outside the ALR.
There are some other areas, such as Langley Township, Maple Ridge and Mission, where there is still a significant amount of developable land. However in many cases, services are non-existent. Sprawl into the middle of the Fraser Valley will have a negative effect on transportation and sustainability.
As long as people keep moving to this area and the local economy is able to supply enough jobs for them, a two- or three-tier market is likely to continue.
Owning a detached home in the future will be available mostly for the well-to-do.
Frank Bucholtz is the editor of The Langley Times. He writes weekly for The Leader.