Courtesy of UniverCity and the SFU Community Trust.
Many homebuyers are discovering that UniverCity is an attractive and complete community, but how does its investment potential stack up against other neighbourhoods in Metro Vancouver?
An analysis prepared by Urban Analytics Inc (UAI), an independent consulting firm, answers this question, finding that UniverCity is Metro Vancouver’s best-kept secret for real estate investing.
In a report released this January, UAI looked at the financial factors that make for a good real estate investment and determined UniverCity’s potential based on those factors. The consulting firm found that UniverCity offers the most lucrative opportunity when compared to similar communities in the region, including Brentwood, Metrotown and Surrey City Centre.
The report showed that a typical concrete condo unit at UniverCity costs approximately $450 per square foot — less on average than most neighbourhoods considered in the study. (To compare, UBC properties are over $900 per square foot.) Please see graph below to compare 1 bedroom condo prices between UniverCity, UBC and Metrotown.
Adjacent to SFU’s main campus, UniverCity also yields higher average rents for privately owned condos than what investors earn in most other neighbourhoods. See graph below that illustrates the positive return on investment for UniverCity, compared to the higher-priced condos at UBC and Metrotown.
The study concluded that lower ownership cost and higher rental income mean that investors at UniverCity earn a higher return on investment. Investors can realize a positive monthly cash flow yield in UniverCity, whereas a larger down payment would be required to achieve the same results in other areas, according to the report.
UAI added that investors will “…find it difficult to purchase a new condominium unit that offers the value and rent revenue potential as UniverCity at SFU.” UAI anticipates that the community will become a much more sought-after neighbourhood as more homebuyers and investors discover UniverCity’s value.
In addition to investment potential, the report also highlighted the community’s panoramic views, appealing architectural design, urban amenities, access to world-class education, and transit availability as key benefits that UniverCity residents enjoy. The study, commissioned by SFU Community Trust, gathered data from public sources and information provided by developers.
This isn’t the first time that UAI has singled out the investment potential of real estate on Burnaby Mountain. Last year, Michael Ferreira of Urban Analytics revealed to Business In Vancouver that the area around Simon Fraser University offers better cash flow to investors than other parts of Metro Vancouver. The study, sponsored by Hungerford Properties, found that rental prices atop Burnaby Mountain are either above or equivalent to other areas of the Lower Mainland, but that the cost to buy property is lower.