Concord Pacific has come a long way from its inception 20 years ago, when it scored a contract to build a master-plan community for Expo ‘86 in Vancouver.
On the West Coast, the condo builder now has built more than 10,000 units mixed with parks, schools and retail outlets. In Toronto, the builder is working on a 44-acre plot that will eventually contain more than 7,500 units.
Chief executive office Terry Hui recently spoke to The Globe and Mail about his plans for the company's future. This is an edited transcript of that conversation.
Terry Hui of Concord Pacific.
How do you see the Canadian condo market from your perch in Vancouver?
The Canadian market is reasonably healthy compared to the U.S. We operate in the bigger markets, and I can say Vancouver and Toronto are very healthy. It's a supply and demand situation – there seems to be a healthy balance between the two and the market did not suffer from the abundance of credit as the United States. The bankers have been much more careful in their lending last cycle. These markets also have a steady stream of immigrants – the demographic change really favours the condo sector as well. Can't speak for all the market, but I think we are starting to see a healthy balance.
Has the demand come artificially from low interest rates, though?
Low interest rates are good and bad. A rate hike is coming, we can't stay forever at this low level. And of course it's good right now because it generates demand for the housing market. But on the other hand, a 1-per-cent hike in the mortgage rate has a much higher proportional impact on your mortgage payment. I think a little bit of rate hike is good for the market, and tighter lending practices will actually put a better balance in the market.
What about the new rules Ottawa introduced that make it harder for Canadians to qualify for mortgage and caps the amount they can borrow against their equity?
It's about finding a better balance for the market – one of the problems has been leverage. When the market moves and someone has borrowed 90 per cent to buy a condo, they can be under water. When those kind of people go underwater, that creates an unstable market. The changes will help make a more healthy, steady market. Less leverage in the market is good for homeowners. Things are more stable.
What are you looking to accomplish over the next 10 years?
There is not a lot of land left in Toronto and Vancouver, so we'll probably start looking at their satellite cities. I think the condo market will become more and more a mainstream bigger share of the housing stock relative to single family homes. The whole condo market demand will go up.
Has the economy changed the way you approach new developments at all?
We have a constant stream of projects – multi-space projects and anywhere from 20-57 buildings. The state of the market doesn't affect how fast we advance, we are constantly looking at opportunities.
Where do you see those opportunities?
People don't want to be driving for a long time to get to work and get to the places they need to go to. The whole urban sprawl is pulling back, and I think that will continue. Things are going vertical – it's a much greener way to use our land. You use less footprint, and the biggest consumption of energy we use in the consumer world is to preserve temperatures. In a single family home, you have a lot of skin to heat up. But there is nothing more green than having your neighbour heat your walls.
Do people understand this when making a buying decision?
They don't need to understand it, it's built into their finances. The whole green movement, I think we're moving through phases. It went from activists just getting attention, then became a good thing to do. Now we're moving into the next phase of green, where it is going to be a fully integrated into our economic and financial system. We are the first developer to put electric chargers in a multi-family environment – a plug to charge your electric vehicle. We're the first guys to put that into our project in Vancouver that's in case you need to use your car.
Are we beyond novelty now with many green technologies ?
I think we're moving to that phase and it's starting to be influenced by financials. For example, you buy a hybrid car for novelty but when more people are using the technology it becomes cheaper. Hybrid cars were quite expensive, they are now cheaper. It is starting to make sense. Same with buildings. We need to be environmentally conscious, it impacts our wallet.
What sort of things are you looking to incorporate into new projects?
Technology is always a big focus here – we were the first to bring in fibre to our buildings 20 years ago. Now everyone is doing that. Look, when you buy a computer, you want to buy ahead of the market so you don't have to upgrade every two years. We want your home to be future proof, to make it a good investment. And not with novelty technology – it needs to be practical. It needs to be used and affect your financial situation. Those are the technologies we want to look at. I really like to focus on energy, because “green” encompasses a lot of things. I'm interested in things like solar energy and geothermal exchange. I think those technologies hold promise. LED lighting is interesting, but heating and cooling are the biggest users of energy.
