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The condominium experience in British Columbia

University of British Columbia

The overall objective of this study was to investigate the condominium market in British Columbia with special emphasis on the metropolitan Vancouver and Victoria areas. Specifically there were four main .goals: 1) to quantify the amounts, type, and timing of condominium developments, 2) to establish a profile of condominium occupants including their socio-demographic characteristics, motivations for purchase, and their level of satisfaction with the concepts, 3) to investigate the developers of condominiums for the purpose of defining characteristics of this sector of the market and its participants, finally 4) to examine the administration and management of completed condominium projects. Several unique situations and unusual problems pertaining to condominiums were also examined. All of the data necessary to quantify the condominium market was available in the Land Registry Offices, Included in the records were the number of strata projects, number of strata units, date of registration, location, use, structure type, and the name of the developer. Transaction data concerning condominiums was also collected at the Land Registry Offices; this formed part of the data needed to construct the resale price index. The quantitative data, described above, also served as the basis for the occupants and the developers surveys. The condominium market was found to have grown rapidly since its inception in 1968. As of November 30, 1977 a total of 2340 condominium projects involving 46,411 units had been registered in the province. Of these 94.8% of the projects and 94.0% of the units were strictly residential. This represents a significant force in the housing market as condominiums in 1976 accounted for 26.2% of all housing starts and 57.9% of all multi-unit housing starts in the province. Geographically the condominiums were concentrated in metropolitan Vancouver (65.6% of all units) and metropolitan Victoria (11.9% of all units). The largest single structural category was duplex projects (42.3% of all projects and 4.2% of all units) followed by lowrise apartments (under 4 stories) which accounted for 21.7% of all projects (36.0% of all units). Overall residential condominium prices have risen by approximately 150% between 1969 and 1977 in metropolitan Vancouver and Victoria although those units purchased from 197 4 on have shown little or no gain on resale. Condominium units have kept pace with rate of increase of single family detached house prices. One hundred and fifty-seven projects of 10 units and greater were randomly selected in metropolitan Vancouver and Victoria. Every eighth unit within these projects was distributed; an owners and a tenants survey - 895 units were thus canvased resulting in 234 completed and returned questionnaires. From these, three submarkets within the condominium market were identified: a) young, apartment condominium purchasers, generally without children. They purchased a unit primarily to establish an equity position in the housing market; b) townhouse purchasers who were predominantly in the 30-3 year old age category and had the highest average numbe of children; c) the older (over 40 years old) apartment purchasers who moved from . single family detached dwellings to escape the required upkeep. The owners survey also revealed that the two most frequently mentioned reasons for purchasing a condominium rather than a single family house were first, the economic advantage (46%) and second, the freedom of exterior upkeep (28%). Further it was found that overall there was a high level of satisfaction, with condominium living. Eighty-eight percent of the respondents reported to be moderately or very well satisfied. The condominium development industry was found to be made up of a large number of participants (1261). The majority of these (90%) produced only one or two projects each, however there were also a small number of firms that were large producers both in terms of units and projects. The largest twenty producers in terms of production of units concentrated, their activity in metropolitan Vancouver, these firms contributed one half of the units in this region. The management of strata council budgets, in terms of both operating and reserve accounts, has improved greatly in the recent past. Less than 9 percent of surveyed projects had operating budget deficiencies, compared to approximately one half of the projects surveyed in 1973. The condominium market is currently experiencing very soft market conditions. This is evidenced by the minimal price appreciation displayed recently, large vacant stocks of unoccupied units (1638 in June of 1977 in metropolitan Vancouver) and the reduction in the level of new condominium construction relative to 1976. Despite these negative aspects the broadening of the consumer market to include all age groups and the high level of satisfaction displayed in the owners survey indicates the condominium market will remain viable in the long-run. The short-run outlook must remain cloudy however until the present unsold inventory is reduced.

Text

2010-02-22

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http://hdl.handle.net/2429/20742

Business Administration

University of British Columbia

Graduate