August 19, 2012
Marketing — and the market
George Wong of Magnum Projects offers his views on some of the turns taken this year by the B.C. real estate market.
BY STEVEN THRENDYLE
George Wong of Magnum Projects is known for creating effective and efficient real estate sales and marketing programs. Wong’s Magnum Projects team has been responsible for marketing some of the most recognized development projects throughout the Lower Mainland, the Okanagan, Whistler, Squamish, Harrison Hot Springs, Victoria, Calgary, Toronto and Los Angeles.
Under his leadership, the Magnum team has sold more than 6,800 units with a total value of more than $2.6 billion. Current projects include Three Harbour Green (Coal Harbour, Vancouver), River Green (Fraser River Park, Richmond), Solo District (Brentwood, Burnaby), Sixth and Fir (Fairview Slopes, Vancouver), and TELUS Garden (downtown Vancouver).
Here are some of his recent thoughts on the Vancouver market. In spring, the young couple’s fancy turns to real estate, yet sales this year have been soft. How was the traffic at Magnum’s presentation centres?
GW: Traffic was generally very good at all of our presentation centres, and it’s important to note that there were some real bright spots, such as the sell-out of TELUS Garden, which we marketed. There were other successful launches, too. TELUS Garden was a unique offering – more than 100 TELUS employees took advantage of special pricing.
At the same time, there are plenty of re-sales out there on the market. There are projects with taglines like “cheaper than re-sales in the same neighbourhood.” Can you actually build a new condo and sell it for the same price as existing properties?
GW: The idea or concept of condo living is a fairly new one, and it’s changing all the time. It’s maybe more of a consumer product than single family homes.
In many ways, this change has actually been driven by homeowners themselves, who repeatedly tell us exactly what features they are looking for in a condo. The main change over the years has been in unit design – you can now get a more livable condo in 450 square feet that you might have needed 700 square feet for in 1980. This is why you will see new condos coming onto the market that are about the same price as ones that are 20 years old.
In the case of downsizers, not everyone wants to grow a garden or put up with house maintenance, so they are looking for reliability and the kind of guarantees offered by, say, the 10/10/10 New Home Warranty. They want affordable, functional places to live. It’s not just downsizing, it’s about density, access to services and transportation, and closeness to work, as well.
Peter Ladner wrote a column in Business in Vancouver earlier this year about Vancouver’s burgeoning professional class – graduates in medicine, engineering, and accounting – and even they are finding real estate unaffordable, especially if they want to start a family. Are developers giving us affordable, family friendly condos, or is that an oxymoron?
GW: It comes down to supply and demand. While it is common practice to demonize greedy developers, the truth is that they need to make a profit in order to guarantee value for investors and get a return on their investment. There is an enormous amount of work required to bring a project to market, with many, many variables that add considerable risk.
Some municipalities – Burnaby is likely the best example – are actively encouraging dense, West End-style developments along their SkyTrain corridors. A lot of people – especially Vancouverites who don’t go out much to outlying areas of the Lower Mainland – have this misconception that Burnaby, Richmond, and Surrey are where all the families live in large single family homes. Many suburbs now feature town or city centres; places like Metrotown and Brentwood in Burnaby, Surrey City Centre, and Number 3 Road/Lansdowne in Richmond. Access to transit and affordability go hand in hand.