Condos are on the rise in B.C.'s Fraser Valley as housing becomes less affordable in Vancouver's core areas and Calgarians rush to purchase second homes west of the Rockies.

According to Vancouver-based residential development analyst Jennifer Podmore, 15 high-rise condos are proposed for Surrey alone in the next few years.

Surrey's average price has reached an unprecedented $445 per sq. ft., which is still much lower than many other Greater Vancouver markets.

"Surrey is the fastest-growing market in the region," Podmore told a recent Urban Development Institute lunch audience in Vancouver.

"By 2021, it's believed that (Surrey) will exceed Vancouver (proper) in terms of population and the south Surrey market is the first area where we're seeing a lot of townhome product come to the market in the next 12 months."

Podmore said more condos will be built in the Fraser Valley in the near future because the area is more affordable than central areas of the Lower Mainland.

But average unit sizes will be smaller than they have in the past as two-bedroom homes become more popular because of price and lifestyle factors.

Podmore's statistics show townhome (6,698), low-rise (5,684), mid-rise (440) and high-rise condos (4,231) now account for the vast majority of the 20,654 new homes being built in Surrey, Delta, Ladner and Tsawwassen.

Of those, which are based mostly in Surrey, only 21 per cent were available for sale because the rest had already been sold.

Abbotsford, long known for farmland and large single-family homes, is getting its first high-rise condo, Brio, by Matsui Developments. The company sold just under one-third of its 173 units for an average price of $462 per sq. ft. - even though most Abbotsford low-rises sell for under $300 per sq. ft.

But Greater Vancouver residents relocating to the suburbs are not the only ones driving demand in the Fraser Valley.

Some Calgarians are also settling there, too, as well as in many other parts of the region.

"It's amazing how many Calgarians want a piece of Vancouver all of a sudden," said Podmore. "A lot of Calgarians are buying for the lifestyle out here."

At a conference earlier this year, Podmore said the 2010 Winter Olympics were having little influence on Vancouver's housing demand. But she said her firm has discovered some Calgarians whose Vancouver purchases are motivated by the Games. "We've met four other groups that have bought out here instead of in Calgary because they are flying out 20 weekends a year to live on this coast," said Podmore, whose firm also evaluates the Calgary residential market.

But the Fraser Valley and the other Greater Vancouver markets aren't wooing many Ontario residents west.

"Quite honestly, affordability is the biggest factor in (Ontarians) not be-ing able to come," said Podmore in an interview. "What we're seeing is that they're going to Calgary instead. Calgary is a head-office city. Vancouver is not.

"So Calgary does seem to attract a lot more buyers from Ontario, much of Quebec and all of the eastern part of the country," Podmore added. "They're drawn more to Calgary or Edmonton than they are to Vancouver."

In the past five years, Surrey has grown by 30,000 units, and 13,196 are due by 2010.

"When we start looking at numbers (of homes) that are coming out, and where the numbers are going, Surrey is one of the biggest places to watch, as is the Langley market and Abbotsford, because that's where our population growth is going," said Podmore.

Only 23 per cent of 6,740 homes under construction in Abbotsford and Langley remain available for sale, with townhomes most in demand.

Gino Nonni, the president of Vancouver-based developer WesGroup Income Properties LP who also plots strategy for jointly owned Park Lane Homes, says the Fraser Valley appeals to developers because it has more available, lower-priced land.

He adds there is also a movement back to "mixed-use, fixed-use" developments that combine residential and commercial projects with amenities such as community centres.

"Most of the municipalities are recognizing that density isn't a bad thing, that urbanization of what are traditionally suburban communities is the way of the future," says Nonni. "There's going to continue to be land constraints, so city officials and the relevant staff are looking at ways to enhance vertical development in the next 10-20 years. That's a good thing. It's the right time."

Nonni believes mixed-use, fixed-use developments will become increasingly popular in the Fraser Valley and elsewhere as the population ages and homeowners prefer to walk - rather than drive - to coffee shops, community centres, libraries and other amenities.

He said Park Lane's Bedford Landing project, a condo and single-family home development along the Fraser River's Bedford Channel in the Township of Langley, serves as a good example of such land use because it's close to many shops.

Nonni predicts more industries will relocate to outlying areas as their employees purchase homes in suburban communities. WesGroup developed the Fraser Health "shared-use building" in the Township of Langley which, Nonni said, allows valley residents to work closer to their homes.

But he thinks it will be a while before more condo towers spring up in Abbotsford and other parts of the Fraser Valley, because homes there sell for less and high-rises cost more to build.

"(A high-rise) works in Vancouver (proper) because we have higher sales values," said Nonni. "As you get further out, it's competing with product that's ground-oriented. If someone can live in a townhouse for the same price as a high-rise, chances are they'd rather live in a townhouse."

But he remains positive that vertical concrete development will continue to grow in the Fraser Valley as sales values begin to match construction costs. He also predicts future Fraser Valley condo towers will be built close to transportation links.

"Transportation-oriented development is critical," said Nonni. "An adjacent commercial-retail core is critical as well."

(Monte Stewart can be reached at monte@businessedge.ca)