Fierce competition for a limited number of properties has been wreaking havoc in the Lower Mainland's single-family-house market for the past year.
Now that same competition, complete with bidding wars, is showing up in larger, multi-family sites as developers compete for land for new projects, says a report compiled by Colliers International.
"This sector has been very strong over the past two years, but it appears that in the last 12 months it really took off," said Kirk Kuester, Colliers executive managing director.
In the first six months of 2015, there were 200 transactions worth about $845-million, says the LandShare Report.
That's about the same number of transactions as the previous year, but the value of them jumped from $519-million over last year, an increase of 63 per cent, the report said.
That includes $162-million in sales in Burnaby, $50-million in downtown Vancouver, $140-million around Cambie Street, $34-million on the North Shore and $34-million in Surrey.
Some of that is attributable to a few big deals.
Concord Pacific Developments bought the old Sears site at Willingdon and Lougheed in Burnaby for $100-million; Onni was the successful bidder, paying $80-million, for the Pearson-Dogwood lands near 57th and Cambie owned by Vancouver Coastal Health. The recent trend has been accompanied by buyers paying more.
In the region, the price has gone from $225 to $250 per "buildable square foot" – the space that developers have the right to build under a city's current zoning.
In Vancouver, it's gone from $350 to $400 a buildable square foot in the last year, Mr. Kuester said.
Several factors are pushing developers – both locals and a wave of new investors from offshore and elsewhere – into fighting for sites.
"It's a function of low interest rates and a lot of consumer demand for product," he said. As single-family-house prices have soared, it's pushed buyers to the condo, townhouse and rowhouse market in increasing numbers.
Mr. Kuester, echoing what some local developers have been saying the last few months, said a new group of people who want to buy properties just as investments to sit on, rather than to develop immediately, have also entered the market. That's boosted prices and reduced the number of developable sites available too, he said.
His firm has acted for offshore buyers on streets like Broadway, where one new owner is planning simply to maintain the existing businesses rather than redeveloping immediately.
The Lower Mainland's developer association says the jump in value of sales isn't surprising.
"Land prices in Vancouver have been soaring," Anne McMullin of the Urban Development Institute said by e-mail. "[There is] limited supply and pocket zonings. High demand equals high prices."
Vancouver's general manager of planning said he's not surprised by the numbers, but doesn't think there has been as big a jump in Vancouver as the numbers might indicate at first glance. "Last year, downtown had only $2-million in transactions but that was unusually low," Brian Jackson said.
As well, the sale of the Pearson-Dogwood lands added a big bump to Vancouver's numbers, but that was a rare sale of a very large site.
However, Mr. Jackson did acknowledge the city is seeing a lot of activity as developers look for sites where they can build multi-family accommodation.