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The New West home of Rick Vugteveen is in Brow of the Hill, an area with fixer-uppers and rentals.

Rick Vugteveen

The tiny old city of New Westminster just might be the answer to the high price of Vancouver real estate.

Last year, Rick Vugteeven and his wife, Lana, were renting a Kitsilano apartment when they decided to go shopping for a house. After quickly discovering that Vancouver house prices were impossible, they decided to look in New Westminster, only a 20 minute SkyTrain or car ride away, if the traffic is kind.

Because it's a historic city, the oldest in B.C., it's got neighbourhoods that are packed with sleepy tree-lined streets and houses that ooze charm – Queen's Park being the most famous among them. But it's also one of the most walkable cities in the province, unlike surrounding suburbs, which were built for cars.

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"We wanted to stay in an area that was very walkable, and had a sense of history and character," says Mr. Vugteeven.

Last fall, he and his wife purchased a 1,900-square-foot character house in good condition for $583,000, on a lot that is 55 by 100 feet. The asking price was $585,000. It needs a new furnace and some of the windows need to be replaced, but otherwise it's a solid and charming house.

The house, built in 1926, is in a part of New Westminster called Brow of the Hill, which is a mix of old fixer-uppers and rental buildings, with a commercial area nearby. It is, like other parts of the city, an area in transition, changing from a rundown and depressed neighbourhood to a place where young families want to fix up their houses and raise their kids. It's also a short walk to the SkyTrain station, which is another major draw. New Westminster has five rapid transit stations.

"The only reason the price is what it is, is that it's in an area mixed with apartments, and historically, is on the wrong side of the tracks. But many of the older houses have now been restored, and there are still plenty awaiting restoration," says Mr. Vugteeven, who is 31, and works at home, for a Boston-based start-up.

"I'd imagine that much of the change is due to the relative affordability of homes here, compared to Vancouver."

He is one of a growing group of former Vancouver residents who've been drawn to the city that sits on the north bank of the Fraser River, across the river from Surrey, sandwiched between Burnaby and Coquitlam.

"The fact is, New West has character and the surrounding areas don't," says real estate agent James Garbutt. Mr. Garbutt is also owner of the Steel & Oak Brewing company, which will open in five weeks in New Westminster. It is a joint venture with business partner Jorden Foss. Both men are typical of the urban-dwelling young person drawn to the city to lay down some roots.

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Mr. Foss recently tweeted: "A guy is pushing a fixie up 3rd. With a baby on the back. That's dedication to a lifestyle. #New West: where hipsters go to have kids."

With a population of 70,000 and a land area of only 15.6 square kilometres, it's not just a hilly city, but also a dense city – with a rapidly growing condo market of about 20,000 units and a couple more thousand on their way, according to Mr. Garbutt. But the housing stock, at around 8,000 to 9,000 houses is fixed, which means house prices will go up with demand.

"Eventually, all those condo people are going to want to live in houses," he says.

Mr. Garbutt was raised in Burnaby and lives with his wife and kids in a 120-year-old fixer-upper in Queens Park.

"It seems like 75 per cent of the traffic at my open houses is Vancouver people. This year it's stood out that Vancouver people are moving to New West. We are more on the map than before, that's for sure. We're getting more attention than we ever have before."

Landcor Data Corp., which happens to be based in New Westminster, provided The Globe and Mail with all the sales for detached homes in the city for the past year. The median price was $650,000. The lowest priced house was for $179,906 and the highest was for $1.7-million. Of 254 sales, only eight of them were for more than $1-million.

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In Vancouver, the median price of a detached house is $1.29-million, according to Landcor.

In New Westminster, there still exists the old-fashioned fixer-upper – the old house that holds potential and promise for a younger buyer who's willing to do renovations. That sort of house is nearly impossible to find in Vancouver because the land values are simply too high to make it worthwhile. The Vancouver fixer-upper has been replaced by the investment property that will be torn down for a new build. As the late urban planning writer Jane Jacobs once said: "Cities need old buildings so badly it is probably impossible for vigorous streets and districts to grow without them."

New Westminster still has old buildings. Jason Lesage, president of the Massey Victory Heights Residents Association, says he frequently meets couples that are willing to renovate them rather than live in a small Vancouver condo. "This is where they can afford to do it and it's still near the bright lights of the big city," he says.

Mr. Lesage, 43, and his wife, Ashley, are typical of the type of new buyer in New Westminster. They used to live in Vancouver and they still work there, so commuting time is a major consideration. They prefer to remain a one-car family, and Mr. Lesage can get downtown by SkyTrain in 35 minutes.

When they went looking for a house in East Van three years ago, all they saw were "eyesores" that needed a ton of work, on small lots, close to busy roads. Like a lot of new buyers, they checked out Burnaby, but didn't find enough of a price difference to make it enticing. They ended up buying a three-level, 2,300-square-foot house for $725,000 in the Massey Victory Heights neighbourhood.

"It's a nicely kept, plain Jane house," says Mr. Lesage. "It had just been renovated, so it was walk-in ready.

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There are still perfectly good houses for less than $700,000, he adds.

"They might need a bit of work to make them nicer, but they aren't disasters," says Mr. Lesage. "We thought about condos, but I'm not a fan of those maintenance fees. I think it's money down the drain. Here, I have a house on land."

Mr. Garbutt can't figure out why prices are so much lower than Burnaby and Vancouver, other than the city is still undiscovered. He says a 1950s two-level house around Deer Lake in Burnaby will run you about $800,000 to $900,000. If you were to drive five minutes from there, to New Westminster's West End or Glenbrook areas, you'd find the same house for $200,000 less.

"I think maybe the big difference between Burnaby and New Westminster is the overseas buyers prefer Burnaby. They haven't discovered New Westminster yet like they discovered Richmond and Burnaby a few years ago. I'm guessing that's why it's been relatively affordable here."

For those who have discovered it, part of the appeal is also the many improvements that have been done in the last few years, such as the River Market, where you'll find Wild Rice Restaurant, Re-Up BBQ, Wally's Burgers and Longtail Kitchen. There are trendy shops popping up, a year-round farmers' market, and the Pier Park for riverside walks. As well, the city has spent money on major improvements along Columbia Street, and has allocated funds to demolish part of the multilevel Front Street parkade, a huge concrete barrier between city and waterfront, built in the fifties.

Developer Robert Fung's condo project on Columbia Street, Trapp + Holbrook, set for completion next year, has helped generate the buzz. Mr. Fung is best known for his stylish modern condos with heritage façades throughout Gastown.

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"It's definitely got a cool factor going on and will increase density to the downtown area," says Mr. Garbutt.

That's if the traffic congestion from all that density doesn't make it unlivable. If there is one huge drawback to New Westminster, as most anybody living there will tell you, it's the traffic. Earlier this year, the toll that came into affect on the Port Mann Bridge has meant cars are choosing to go over New Westminster's Pattullo Bridge instead, which has caused rage-inducing traffic jams at rush hour. It is a headache, and one they feel could be solved if there was also a toll for the Pattullo Bridge.

The other worry is that B.C.'s largest stock of heritage housing could be lost if New Westminster house prices should climb. Earlier this year, a lovely heritage house on 3rd Avenue in Queen's Park was sent to the landfill because it was sitting on two lots.

The positive aspect of the new young buyers is that they're more interested in saving the old houses, not demolishing them. They're in it for the home, not the lot value.

"There is character in New West and that's slowly being discovered, and that's why it's getting increasingly popular," says Mr. Garbutt. "It's a hidden gem because it's a small town in a big city."

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