Single-family homes are unattainable to most families in the Lower Mainland and many are looking to townhouses as an alternative.
James and Denny explore why townhouses are becoming the future of family homes, and the cities that are keeping up with demand better than others.
This episode will cover townhouses and how they are the future family home, alternative options for young families, townhome layouts, strata fees, the perfect time to upsize, and future developments.
Read the Transcript Here
Hi everyone, I’m James Garbutt. And I’m Denny Dumas. And this is the Garbutt Dumas Real Estate Podcast.
Denny: I think the idea of owning a single family home is starting to evaporate in Greater Vancouver. And we’ll clarify what that means a little bit but it wasn’t too long ago, maybe half a generation ago. 25 years ago, maybe? Where like, the long term goal for almost everyone in Greater Vancouver was I want to own a single family home, I want to have a big backyard for my kids and dogs to run around in and that is slowly starting to evolve and adjust.
As real estate prices continue to climb, as our city continues to become more and more desirable to live in worldwide. We are seeing young families adjust the way that they’re living. And in a lot of cases that is into strata in some neighborhoods to have half duplexes that is into half duplexes or townhomes. And I think they are just adjusting their lifestyle slightly to be okay with less outdoor space, to be okay with shared walls in the for the purpose of living in the city that they want to live in. Examples to get into a townhome and the Tri Cities let’s say on the low end, probably $850,000. Same area, single family probably on the low end $1.4-$1.5.
So those numbers are becoming unachievable for a lot of young families at least in the early part of them having a family in their mid to late 30s. And I think it’s gonna continue to go that way. I think developers and cities are going to continue to evolve to build more and more spaces that are built for young families with you know, maybe two to three children, probably doesn’t fit a family like mine, with six. But I think cities will just continue to evolve to be more townhouse and duplex oriented to fit more families for lower prices with slightly less space in desirable neighborhoods.
James: I mean, if you look at other parts of the world that have large cities with long histories, there’s, there’s many families that live in apartments, townhouses, row homes, more densified housing. It’s common, it’s especially like I mean, you name it, there’s Vancouver’s a relatively small city on a global level. But I have no, I’ve been Realtor since 2008 and over my career, even at the very beginning of it, I noticed people of my age and era that were young families looking to, looking to get a detached home starting to see that dream fade. You know, we all had memories of chasing butterflies and blowing bubbles behind white picket fences, a quiet tree lined street but it it’s not the same as it was before. And I do think there are some pros to the new age, the new family house in the new family house is something that’s more densified, more stratified, that’s not you know, call it an 8000 square foot lot with a standalone 3000 square foot home.
Historically, school teachers, police officers, firemen they used to be able to purchase these homes but if you look at the salaries of these careers, and you look at the price points of these homes are now $1.8 million. It’s, it doesn’t make sense. You need to either come into money or you need to be wealthy or have a high income. At the start of my career, a detached home was around $500-$600,000 and it started to feel out of reach and 20 years ago we’re talking $300,000 or $350k or $400k in some markets but nowadays we’re, we’re saying that under $2 million is a desirable price point. And so what we’re really talking about is other options and where they exist and tips and suggestions on what to think about because if you have dreams on a detached home and many like if you’re looking at East Van and so your budget is $1.5 million and even in Burnaby and North Vancouver and New Westminster often that comes with renovations and work. And in many cases that’s a year of your excess time and energy going into it. And at the end result, in many cases, you’re getting a mediocre layout, you might be getting a 1960s postwar box that has 900 square feet of floor, small bedrooms, small closet, small kitchen.
And I think the purpose of this episode is to let you know there’s other options out there. And those other options are townhouses and half duplexes. And we’ve been preaching townhouses a lot because a lot of markets we sell and they’re pretty prominent. And half the plexes are prominent other markets. So Denny, where do we begin with this? Because I think in short, I think a lot of people need to know that the layout and floorplan of say, if I were looking at North Vancouver, a $1.2 million to $3 million townhouse we’ll have often a better layout and floor plan than a $1.8 million house.
Denny: Oh yeah.
James: And the downside is you don’t get that white picket fence with a massive backyard and a standalone house. But the upside is you’re usually surrounded by many other young families. So if you have young kids in these neighborhoods, they’re loaded with kids. Kids playing hockey in the streets or whatever you name it. But if you have young kids, townhouses, townhouse complexes are often loaded with young families, and I think it’s a great option for more and more people to consider.
Denny, where do townhouses, where do they exist? Where, where would you start looking? If you’re a homebuyer, you’re open minded to a lower mainland maybe let’s start with the Tri Cities. Let’s make some, what would be your suggestions on where to focus your energy?
Denny: It’s a loaded question. The, I think one other big benefit to point out is cities are evolving in a way that more density is close to amenities and SkyTrain and transit. So, in a lot of cases now, the townhouse complex, yes, you’re going to be surrounded by young families. Yes, there’s gonna be lower maintenance. Someone like me really appreciates lower maintenance, but you’re also going to be walking distance to probably the best features of that municipality that you’re living in.
The single families are getting farther and farther away from those amenities because they’re tearing them down to build more higher density stuff around neighborhoods. So I think that is also a pro of shifting gears towards potentially strata or half duplex or a townhouse is proximity, walkability because they’re building them in higher density neighborhoods close to transit and amenities.
James: I think what one, you’re absolutely right, it’s inevitable. It’s the way the future is going. But certain markets don’t have enough of them and they’re not making a lot of them. Like if you look at New Westminster, for example, there’s not a lot of townhouses north of the Fraser River. Queensboro has a lot of them. So New Westminster is a unique one where there is a lot of rezoning potential and the official community plan that allows for future townhouses but the when you when you do the math, and you look at the timeline and the uncertainty of the three year process to rezone, the uncertainty of nimbyism, knowing if neighbors are gonna uproar, knowing if Council is gonna vote your approval, and the gain of density you actually get it’s a very low return on energy compared to other options. So that’s why you don’t see a lot of new townhouses hitting New Westminster. There’s just not enough incentive to encourage investment.
When I have families looking for a family home in New West, the frustration is there’s not a lot of townhouses and there’s not a lot of houses. And the houses that come up or can range from 120 years old to 60 years old or newer, but there’s, if their budget is close to a million, it’s gonna be a fixer upper house, and if they wait for the next town house, there’s usually competition Some offer areas that go under the radar, you know, Burnaby East has more larger older townhomes than than other areas. And I will say one suggestion and this probably applies to a lot of markets North Vancouver, Port Moody, Burnaby, even New West, older townhomes have often fantastic layouts. Older townhomes can be large, older townhomes and when I say older I mean 1990s,1980s it can be even older but like a 1990s built townhome, will you know, a lot of cases have a two car garage, they be over 2000 square feet, they they’re typically have a decent sized yard, a driveway. Not like the modern stack townhomes that are almost like an apartment.
So you know, if you’re in Port Moody on Heritage Mountain or in North Vancouver, you often find that you might get a far better family layout in a townhouse for a much better price than if you’d be spending half a million dollars more for a worse layout for a detached home.
Denny: At least.
James: So the sum is like the old older townhouse, I think is gonna get increasingly desirable because of the size. I think it already is desirable for some that need to set space for their family. But the way that they’re making newer townhomes tighter and skinnier. I think that will always have a market because they didn’t seem to fit three bedrooms and less and less square feet these days. But one suggestion would be: be open minded to older townhomes.
Denny: There I think a good point is that they just are not building enough of them currently, as single family get more and more out of reach for a lot of normal people who were born and raised in Greater Vancouver and are raising families now in Greater Vancouver. The, the single family is just out of reach. And so where are they going for more space? They’re going to townhomes but there just aren’t enough of them. Like the average price point of a townhouse last year in Port Moody was over a million dollars. Port Coquitlam I don’t have the exact number but I would guess in like the $850k range. And that’s only going to continue to go up just because of the lack of supply comparatively to how many people like, what percentage of our clientele every year upsizing. 75%? Majority.
James: Probably 60% anyway.
Denny: Yeah a lot. Yeah. And where are they going? You know, a select few are upsizing the single family homes. But the majority of them are looking for townhomes in good neighborhoods, like the Tri Cities and there just aren’t not enough. Port Coquitlam maybe is doing a better job than most municipalities in terms of building for a future, right? Not like 25 years ago, like some cities that won’t be named. But PoCo seems to be doing a better job. They have that like off Ranger Lane there, maybe 500 townhomes kind of in that range. Burke Mountain has a lot of them. Port Moody, very few. And it seems like in Port Moody. There’s one new townhouse complex that comes up every year but it’s like 30 units. And so they’re just not meeting enough of how many people need these types of homes.
James: If a new townhouse complex were to get developed, it would also likely be smaller units like they would likely be 13 to 1300 would be the common size and 1600 might be the larger end unit.
James: And this is for tandem garage side by side townhouses not the stack ones. Stack townhouses get much smaller. Yeah, yeah. And what we tend to find with those so if you buy the 13,000 or 13,500 square foot, tandem garage, three bedroom it’s a pretty tight living space versus a 2100 square foot 30 year old townhouse. You’re gonna feel less of a pinch for space as if you have young kids as they get older. And we do notice that even even on the modern the townhouse is the new house is what we’re trying to talk about here. But size matters and size may not matter at the start. I mean, the reality is new and shiny is desirable to many, and in some cases, it’s right near the skytrain and right close to the amenities you want. So you just prefer the location over other options, whereas the older ones are typically maybe less walkable, a little bit up the hill in Port Moody’s case. But they have better layouts than half the homes that sell call it around the mid $1.5 million range.
Every city has a different offering. Port Moody does have good townhouse offerings even though but they’re just low on supply that people just want more than they have available. Coquitlam has a lot of townhomes as well. New West in Queensborough has a lot but North of the Fraser doesn’t. Burnaby is a big mixed bag of everything. Burnaby has for the amount of, I’d say for the amount of properties there, it’s probably low on townhomes but they have a wide range of everything they have some really spaced out large and older townhomes at the bases Simon Fraser University and they have a lot of high density townhomes say by Metrotown and Brentwood.
Burnaby is like three cities in one so it’s a hard one to really compare.
North Vancouver great townhouse options I’d say most families looking out that way, if you’re struggling to find a detached home consider making the pivot. And East Vancouver I would say is low on townhouses unless you’re looking at Champlain Heights which is the south east corner of Vancouver. And a lot of that is leasehold land. So just be aware of that which is okay too.
But a little bit cheaper price point because it’s not freehold but East Van is loaded with half duplexes.
So not all these markets offer half duplexes. New Westminster doesn’t have many. Port Moody doesn’t have many. I don’t think Port Coquitlam has many. Burnaby has a few. North Van has a few in some areas, east of Lonsdale. But East Van has far more half duplex options than townhouses and I think if you’re a family, looking for a place like that urban life, consider a half duplex.
We happen to be listing a beautiful one, not that this is for everybody. But to give you an example of value at this moment, we’re February 2023, custom built woodland Grandview neighborhoods 1600 square foo,t four bedroom three and a half bath front back duplex 600 square foot aside. They’re running about one eight to one 9 million. I mean that’s brand new so there’s GST there as well.
Denny: Brand new. If you’re looking at something, let’s let’s say 20 years old in that exact neighborhood. Is that $1.5-$1.6 right now?
James: Yeah, yeah, I would say similar. Sometimes you can, I mean, depends on the size. There are half duplexes that are 12 or 1300 square feet, but I think there’s, I think $1.5-$1.6 is good for something that’s 20 years old. $1.6-$1.7 is good for maybe something that’s zero 10 years old, zero that like basic finishing are not as desirable in the street. But $1.8 is tree lined street close to Commercial Drive, good, good block, good pocket in you know, exceptional design and development. So that’s, that’s on the high end.
James: In East Burnaby, has duplexes as well but East Burnaby also has townhouses. So all the overall message is more and more people are going to be living in stratified homes, and the dream of a detached home. If you’re handy and willing to do the maintenance and willing to fix up something that’s a little old and needs ongoing work, go for it. But if, if that is not your skill set, and you just want a nice family place to live. If you look at the past five years or more, I would say that you’re likely your investment in a townhouse or half duplex will probably perform as good if not better than the market. And I would say if we look over the last decade, townhouses have done pretty good on the return on investment. And I think they’re outperformed a lot of other product types.
Denny: And I don’t think that’s going anywhere. I think it’s, it’s a mental hurdle to get over for some, is sharing walls. And you know, I have this dream of my kids growing up with this big backyard. But it’s a phenomenal stepping stone and a pretty secure one in that, in 10 years from now, if you know, the houses are unaffordable today. The townhouse is a great option that maybe gets you in a better neighborhood, closer to amenities closer to, you know, stuff to do for your kids, closer to parks. It’s a good stepping stone in that in 10 years from now it’s going to be extremely desirable and a lot more expensive, which may then help you move up to that single family home in the future.
James: Do you have any tips or suggestions that come to mind that may not be like obvious for people looking in that space when you’re thinking of clients that are looking to buy say a townhome?
Denny: Position in the complex is important. Whether you are facing another unit’s windows or slightly off centered, can make a big difference in resale. Being an end unit, if that end unit today maybe costs an extra $50 grand or $75 grand in 10 years from now that could be an extra $250,000 just because the way I think that our city is evolving and how people are living is moving towards smaller, shared spaces like townhomes and duplexes. And if you have the premier one in that complex that maybe has the little corner yard that’s fenced off, that’s a little bit bigger than everyone else’s or is facing the green space instead of facing another person’s living room window. I think those are going to be continually more desirable over time.
James: So position in the complex. I 100% agree with you. I mean anytime you get a little more space, little more natural way, a little more quiet, a little more yard, at’s a good thing.
James: A lot of new dense townhouses have I mean certain designs that might be seen inside the unit where the backyard you have to go through the garage to get to. You know? Because there’s three levels it goes garage, main floor, bedrooms up This is advice if you’re in a position of choice. I mean, don’t get me wrong. In some areas you’re just lucky to have a townhouse in other areas, you might have choice. But if you have the option of trying to get a yard that’s walk accessible from the main floor, I think that’s important. You know these townhouses go to young families and kids want to play in the yard. Three bedrooms, I mean, if you have like, not that two bedroom townhouse, still perform well but three bedrooms accommodate most family dynamics and even if it’s a family of one kid and a home office, but if possible, try to get three bedrooms on the same level or three or at least three bedrooms up you know, if you have two bedrooms up in one in a basement, it’s a little bit different for some. As I mentioned old is okay. In a lot of markets new comes with less space, old comes with more space.
Strata fees. When you’re buying into a townhouse only complex the strata fees are reasonable, like they tend to be lower unless there’s significant work needed. In some of these older places, they’re spending a lot of their budget on landscaping and fixing fences and fixing siding and updating the complex so that, that does come with the turf of an older place. But if you’re looking at a newer place, if you had the option of a townhouse that’s a standalone townhouse complex versus, say one of a dozen townhouses at the base of a tower. The ones that are the base of the tower tend to have a really high strata fee because they’re paying for the elevators, heating the common space. All the additions are like a big condo and the strata fee comparison could be like if, it’s a standalone complex construction might be $300 a month, give or take, versus if it’s at the base of the tower, it might be $800 a month. So that can significantly affect the value of the place and just be cautious of the strategy. And ideally if you have the option, stand alone townhouse complex.
Denny: 100% agree.
James: In the half duplex world, if you’re going older just note, you got to get along with your neighbor, you got to agree when to paint and when to do the fence and once the roof together. If you’re new, you can shelve that concern for a long time. But yeah, I mean knowing your neighbor I think is important and a half duplex well because you’re kind of intimate with that paper. And this is more of a East Van thing because that’s where it’s most prominent.
Denny, any closing notes?
Denny: This is one of the best years I’ve seen in my career to upsize. If you’re thinking about upsizing, call us. We would love to kind of educate you on what that process is going to look like. But the townhouse and the house has become a lot quieter than it was 12 months ago, and in some cases, decreased in value, significantly comparatively to that condo that you’re living in. And that’s not going to last forever and may not last through 2023.
James: We’ve been lucky and grateful to be behind many townhouse listings and sales and we have an awesome half duplex in East Van coming up. Whether we’re your a realtor or not, just keep watching what we have to sell because we’re lucky to deal with a lot of people in these project types.
Denny: We’ve got a couple of good Port Moody townhomes coming up.
James: Oh nice. If you’ve made it this far, thanks for listening.