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Friday, April 12, 2024

Mount Pleasant condo development targets investors

The same week the City of Vancouver approved a new housing strategy to boost affordability and curb speculation, an upcoming condo development is targeting investors looking to buy units and assign them before completion.

An email was issued Thursday to presale registrants of the Second+Main development with the headline “GREAT AND EXCITING NEWS FOR HOMEOWNERS AND INVESTORS!

The development, which is located at Main and East 2nd Avenue, is currently marketing a 598 sq ft. “micro” two-bedroom at $824,900 (plus GST)

Micro two bedroom
Floor plan for micro two bedroom unit at Second+Main.
Second+Main investor no assignment fee email
Email sent Thursday to presale registrants of the Second+Main development.

The email reads: “Our Investor Program at Second + Main is kicking off by offering 0% ASSIGNMENT FEE. Now you can benefit the $0 assignment fees for the assignment of your investment unit. Talk to one of our sales consultants about this exciting program.”

Housing Vancouver strategy aims to curb speculation

The no-fee assignment offer from the developer comes the same week that the City of Vancouver approved its Housing Vancouver strategy.

“We want people to stay, live, and build a future in Vancouver. Our new Housing Vancouver strategy ensures that future housing developments across the city will provide the right homes for our residents, not investors,” said Gil Kelley, the City of Vancouver’s General Manager, Planning, Urban Design and Sustainability, in a statement.

“The effects of speculation have caused significant consequences for housing in Vancouver, and has hindered many of our attempts to build affordable rental housing as the high cost of land make projects unviable,” he added.

A keyword search of the strategy document returns 0 results for the terms assignment, presale or flipping. In contrast, supply is referenced 73 times.

Vancouver assignments widely available on Craigslist

A quick Craigslist search for assignments in Vancouver pulls up dozens of units in buildings about to complete. The units are priced hundreds of thousands of dollars above the original presale prices, as the real estate market has skyrocketed in the past couple years.

Purchasers who want to assign or “sell” a unit before the building is complete typically pay an assignment fee — usually between 1.5% to 2% of the initial purchase price.

A $0 assignment fee, like what is being offered to investors at Second+Main, is unusual, and comes at a time when many developers are instead increasing assignment fees or banning them outright.

Developer boosts assignment fee to discourage speculation

Reliance Properties, the developer behind the Burrard Place development in downtown Vancouver, recently changed its rules around assignments.

Instead of a 1.5 per cent fee, purchasers who want to assign the unit now have to pay the developer 25 per cent of the profit made on the assignment.

“The change is designed to discourage speculation,” said Jon Stovell, president of Reliance Properties, in an interview with the Vancouver Sun in October 2017.

Presale condominiums are not subject to B.C.’s Foreign Buyers Tax and therefore can be bought by foreigners and flipped as assignments before completion.

Second+Main is being developed by CreateProperties and Northchild, with completion targeted for late 2020.

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Peter Meiszner
Peter Meiszner
Peter Meiszner is an experienced journalist and media relations professional, based in Vancouver. As founder of urbanYVR.com, he has been reporting on urban development across the Lower Mainland since 2016, and has also served as vice-chair of the Gastown Historic Area Planning Committee. In October 2022, he was elected to Vancouver city council and is no longer actively reporting for urbanYVR.

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