By PAUL SULLIVAN
Wednesday, March 13, 2002
If you're wondering what effect the Bank of Canada's interest rate cuts have had, there's no need to look any further than Vancouver.
This city has gone nuts. February was the hottest month for real estate since April of 1994, with sales up 69 per cent over this time last year.
People are buying houses and apartments as if they've stopped making them. Buyers are paying more than the asking price for houses, and condo project are sold out before the ground is even broken.
This, even though British Columbia's economy is one of the worst performers in the country and population growth, according to yesterday's release of the 2001 census, has slowed by more than half since the last one in 1996.
But, in Vancouver, you can't go 10 feet without stumbling over a construction crane.
"It's the interest rates," confirms Colin Bosa, of Bosa Ventures Inc., a member of one of the city's most prominent development families.
Mr. Bosa is a prime beneficiary of the hot market. A couple of his downtown condo projects, the Eden and the Mondrian II, won't be completed until later this year. Of a total of 394 units, there are 33 left.
There are other factors. In recent years, the flat economy has made developers reluctant to commit, so supply has dwindled while demand has been steadily building thanks to cheap mortgage rates. In January of 2001, there were 1,900 apartments for sale in Greater Vancouver; last month, there were 622.
Adding fuel to the fire, says Mr. Bosa, are investors, who are turning from the equity markets to real estate as a better bet.
Ergo, feeding frenzy.
Vancouver already has the third-highest urban density in North America, behind New York and San Francisco. And as developers fight over the dwindling available space, there's nowhere to go but up. And now that City Hall has eased height restrictions, up we go.
The tallest building in town is the 150-metre, 48-storey One Wall Centre, a combination Sheraton Hotel and condo tower on Burrard Street. It's also just been voted the No. 1 skyscraper in the world for 2001 by Skyscrapers.com, triumphing over Bigfoot competition such as Manhattan's Trump Tower.
But it won't hold the record for more than a New York minute. Construction is under way on Bentall Five, which will be the first building in Vancouver to break the 500-foot (152-metre) barrier. Then comes 687 Howe, a combination Crowne Plaza Hotel and condo complex that will top out at 507 feet (154 metres), making it the tallest in town.
But Skyscrapers.com reports that developer Peter Wall, to whom size apparently matters, is trying to get approval for the Wall Financial Tower, also on Howe Street. At 60 storeys and 600 feet (182 metres), it will restore Mr. Wall to his spot at the top.
This frenetic attempt to build stairways to heaven has been fuelled by an adjustment of the height restrictions in the downtown area. For years, height was pegged at 450 feet (137 metres) by City Hall, so the skyline would not compete with the view of the mountains. That led to a "table top" skyline -- 500 tall buildings, none over 450 feet.
According to a recent poll, people believe table top is boring, so, while careful to preserve view corridors, the city now makes it possible for buildings to reach 600 feet.
Of course, once that happens, somebody like Peter Wall will want to take it higher.
All of these skyscrapers are supposed to be earthquake-proof, but if the big one ever does rattle our cage, engineers suggest that falling glass will be the greatest hazard, along with giant tsunamis, electrical fires, collapsed roads etc. What, us worry?
How long can this go on? What if the B.C. economy actually recovers (a long shot, I'll admit)?
Colin Bosa calls any attempt at prediction a visit to "no man's land." But if interest rates continue to stay low, he sees another year or even a year and a half before supply finally catches up to demand.
Whatever happens, Vancouver's skyline will be forever transformed. And if you're the head of the Bank of Canada, you can be forgiven for seeing it as a lasting monument to your monetary policy.