State OF THE MARKET
The last 12 months have been relatively uneventful in West and North Clayton. One notable change since last year’s report, however, was the approval of the Surrey-Langley SkyTrain, which will run along the southern border of West Clayton on Fraser Highway.
Despite the approval of the new SkyTrain, which was anticipated to create a surge in real estate demand, there have been very few land transactions in the last year. This is a result of the broader real estate market correction and the COVID-19 pandemic which saw a decrease in the selling prices of new homes and thus reduced land values in the area. Land values have decreased to the point that they do not meet the price expectations of many property owners which means few owners have been motivated to sell. Although sales activity is picking up again as we experience a late Spring market, the quantity of land sales over the past 12 months is down 59% compared to the 12 months leading up to last year’s report.
Additionally, land values are being held down by the lack of progress in the construction of the required services (sanitary, water, and storm water drainage). The timeline of these services is unknown which adds a level of risk to purchasing development land in West and North Clayton as builders do not know how long they will have to pay holding costs on a property.
As we have done in the past, we have mapped and analyzed current development applications to find trends and highlight regions with a high concentration of active applications (outlined in green on the below map). While there are a handful of development applications spotted throughout West Clayton, nearly every one lies south of 74 Avenue as that is the boundary for the first phase of servicing (water, sewers, drainage) required for future development. Land north of 74 Avenue is expected to have a much longer timeline for services so developers have yet to submit applications.
As development in North Clayton is anticipated to be many years away, there currently aren’t any active residential development applications located there.
CURRENT STATE OF WEST & NORTH CLAYTON
Below are updates from City Staff on the current state of development in the emerging neighbourhoods of Clayton.
- Planning staff scheduled a review of the West Clayton plan, taking into account the proposed SkyTrain route along the southwest border, but they won’t be starting the 2-3 year process until next year.
- The City has secured the outstanding Statutory Right of Ways (SROW) required for sanitary servicing, however, this was only one of the servicing hurdles holding up development.
- Construction that had begun on the stormwater detention pond (that will eventually service land south of 74 Avenue) has been further delayed until Fall 2022. This pond is a prerequisite to development and its delay has further impacted development timelines in the area.
- A developer (or group of developers) has yet to commit funding to front-end the cost of the sanitary servicing. This is the primary hurdle holding up development.
- A recent update from the City explains that they will not be working on any new Neighbourhood Concept Plans until at least 2021 so the North Clayton plan has been moved to the backburner. Once initiated, it will likely be a 2-3 year process.
- Despite the lack of progress with a Neighbourhood Concept Plan, investors remain interested in purchasing development land to hold until development can occur.
If you have any questions, or if there is any further information that would be helpful to you, don’t hesitate to give us a call. To receive future reports directly to your inbox, please sign up for our development land newsletter here.
In creating this report we consult City of Surrey planning staff, survey multiple land transaction reporting systems and analyze municipal development data to bring you the most relevant information. Sources: Commercial Edge, MLS, City of Surrey.