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Living the swinging condo life Add to ...

Brothers Mike and Dave Burns look out of the floor-to-ceiling windows of their two-bedroom condo near Vancouver's trendy Yaletown and consider the downtown neighbourhood.

They live in an 840-square-foot apartment decorated in the contemporary minimalism of a show suite. There is the leather couch, the teak floor lamp, the 48-inch plasma TV and the polished concrete floor.

Mike, 26, points toward nearby towers in almost every direction where friends reside; his girlfriend lives in one of them.

The brothers have been living in the Brava building since April, when after several years of renting, they decided it was time to get into the real estate market before it passed them by. They are part of a demographic that now represents a significant share of the urban condominium market: twentysomethings who work at white-collar, trade or service-industry jobs; enjoy the benefits of not having to drive everywhere; and are often single and sociable.

In Vancouver, Toronto and other large Canadian cities, it's a demographic that's reshaping neighbourhoods and the condo industry. And it has prompted savvy builders and marketers to adopt new sales methods, like throwing catered parties to launch new buildings, and using the Internet in more creative ways.

There was a time when most people would spend the bulk of their young adult years as renters. Only when career advancement and marriage came along did they consider the daunting real estate purchase - the biggest single buy of a lifetime.

These days, condos are like a rite of passage for investment-minded young adults, who see their purchase as just a starter for a series of future real estate buys.

In Vancouver, condos geared toward these first-time buyers have popped up in downtown areas such as Yaletown and Gastown.

Living there makes it possible for residents to save money on transportation by walking to work. And because their condos come rife with amenities, they don't even have to leave the building to find a party.

"My friends are here, my girlfriend is here, my work is here," says Mike Burns, who works as a banker. "For this period in my life … it just seems that everything I want is right downtown. It's like a campus for young professional grown-ups."

His brother, Dave, 25, is a plumber who works at nearby construction sites where condos like his are going up. About the only time he uses his car, he says, is to go play soccer and see his girlfriend.

According to Brad Lamb, Toronto's "condo king" and star of the reality TV show Big City Broker, new condos are the hottest commodity in North America, and it's a market driven by young first-time buyers and the investors who compete with them. About 40 per cent of the new suites in downtown Toronto are built with that demographic in mind, he adds.

"I've done many, many developments that are geared toward younger people - probably approaching 90 new developments in Toronto, Ottawa and Montreal," Mr. Lamb adds. Units in these projects may range from 400 to 2,000 square feet, but most of them are less than 900 square feet, he explains.

"So the bulk of them will be less than half a million dollars. My firm's product - that we promote and develop and sell - is really for people 20 to 40."

He notes that a new unit priced under $250,000 in downtown Toronto is snapped up immediately.

"Twenty years ago, the condo lifestyle in any city, including Toronto, was looked down upon by the generation of people that sort of drove the economy back then - the people who came from the single-family home, suburban lifestyle," he explains.

"The unique factor today is [young]people are completely committed and comfortable buying condos. When I started selling condos in 1988, young people had their parents on their shoulder, saying, 'You don't want to buy a condo. They're a very risky investment.' Well, young people today know better. They know it's no riskier than buying a single-family home."

In Vancouver, however, prices downtown are creeping so high that many young adults are shifting their searches to the east side and the suburb of Burnaby, places that won't require them to take bridges or freeways to get into the core, says Bob Rennie, the city's most high-profile real estate agent."The problem that we have is there is very little developable land in downtown Vancouver," Mr. Rennie notes.

"Now, for a 600-square-foot suite, it's all starting to break $425,000, and that's in the bottom of the building for a one bedroom. So without mom and dad's help, downtown Vancouver is becoming difficult for the young buyer."

Nic Jensen, 27, a sales and marketing manager for Amacon developers, helped the Burns brothers find their condo, and he owns one himself. He purchased a 500-square-foot unit in a downtown complex called Yaletown Park three years ago. It was such a desirable property that all 494 units in the first two towers sold out in one weekend, with line-ups of mostly young people going around the block. (A third tower sold out later.)

"Condo living in Vancouver has become so socially acceptable, whereas five years ago it just wasn't there," he says.

Like a lot of first-time buyers, Mr. Jensen asked himself the question, "Why rent when you can own?"

He purchased his condo for $230,000 with a 10-per-cent down payment and a five-year mortgage term at an interest rate of 4.7 per cent. His monthly payment is $1,250, compared with the $1,500 a month he could get to rent his one-bedroom unit.

The Burns brothers paid $482,000 for their two-bedroom unit last spring, with a five-year loan from their parents at a 5-per-cent interest rate. Together, they pay $2,400 a month, which, when the strata, or maintenance fee, is included, is much higher than what it would cost to rent their space.

But an identical unit in their building is on the market for $70,000 more than what they paid. The upside is that they are now in a market that could have easily passed them by if they hadn't acted fast enough. (And they're confident enough in the condo market to have purchased a second property - a unit in Abbotsford that they plan to rent out.)

"There are three things going on right now," Mr. Lamb says. "Incomes are higher than they've ever been. … And the prices are very high. But interest rates are low, and they're allowing people to get in."

It's generally agreed that the income level required for the small starter apartment is about $50,000 a year in both Toronto and Vancouver.

"What attracts [buyers]is they don't want to be renting for the rest of their life," Mr. Lamb notes.

There's that, plus the fact that most new buildings are chock full of amenities for the young adult. In the two-tower complex where the Burns brothers live, for instance, there is a full-sized gym, an outdoor lap pool, media room, party room, study room, billiards room, communal hot tub, sauna, steam room, and suites for out-of-town guests at the reasonable rate of $50 a night.

"This is absolutely a dating environment," Mike Burns says. "Sometimes it's funny, walking down to the pool deck and there are lots of girls lying around," he adds, smiling broadly but carefully noting that he and his brother have girlfriends.

When Mr. Lamb hears about Vancouver's campus-like downtown condo environment, he is immediately reminded of the Toronto complex on former railway land called CityPlace.

"This is a ghetto of young people. There are 9,000 or 10,000 condos that they are building down here … and it's great for them because there are a lot of people their own age, so if you want to meet a guy or a girl there are lots of opportunities there. They build large facilities with tennis courts, with squash courts, with bowling alleys - there are always places to go to do things, to meet people. So there is a tremendous amount of facilities. And for some young people, that is very desirable."

The resounding themes are convenience and social networking - youthful demands that are not lost on the marketers behind the new developments.

One of the most obvious methods to reach the target audience is to hire a young staff of marketers. Mr. Jensen of Amacon says he has used his own social network to sell condos, and he sees the hugely popular social networking website Facebook as a valuable future tool for the marketing of condos.

Big parties catered by cool hangouts are now routine events used to launch new buildings.

In the case of the Donovan condo complex in Vancouver, Cressey Development Group implemented a unique and controversial marketing campaign that included a five-part Web-based "viral video." Cressey hired a local filmmaker, and actors Crystal Bublé (singer Michael Bublé's sister) and Matty Finochio (Martin Short's nephew) to portray characters Anya and her flamboyant and stylish gay friend. They could have walked straight out of the raunchy TV series Sex and the City.

In its quest for the youth market, the Cressey series - about a love triangle involving Anya, her gay friend, and a handsome male resident of the building - pushed the boundaries of the usually conservative world of condo marketing. Media manager Marcella Munro, who helped produce the series, says she even got calls from surprised marketers in Mobile, Ala.

But their inspiration was the gay-friendly, liberal-minded West Coaster who wanted a downtown lifestyle.

"We asked, 'What kind of life could we envision people living there having?' as opposed to just talking about faucets and countertops and location," says Ms. Munro, a former Toronto-based producer of CBC television shows such as The National.

Judging from the average 15,000 hits a day that each "webisode" drew, the slice-of-life comedy may have paid off. The Donovan sold 97 per cent of its 152 units within two months. A 573-square-foot unit went for $395,000.

Savvy marketing schemes aside, is all this snapping up of real estate for people who are new to the work force? Mr. Lamb dispenses some advice for them.

"If you are going to borrow money, borrow it on a five-year term so five years from now, you know what your payments are," he counsels. "And don't live hand to mouth - put money away for a rainy day."

Mr. Rennie, meanwhile, believes that Vancouver will become one of the most expensive cities on the planet, a fact that will protect any investor.

"The same pressure that's pushing prices up and causing no product and no availability of residential developable land downtown is the same safeguard that's going to protect your value," he says.

"You got in where others can't."

Special to The Globe and Mail

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