Stay in touch with NIHO!

Boomers lead pack in residential housing

John Mackie , Vancouver Sun - May 23, 2008

People have been cashing out of the Lower Mainland and seeking the good life on Vancouver Island, the Okanagan or the Sunshine Coast for decades. The trend has only increased in the last few years as the baby boomers flex their financial muscle.

"Certainly the recreation market has been led by the baby boomers entering or nearing their retirement years," said Cameron Muir, chief economist for the British Columbia Real Estate Association.

"They're looking for recreation property not just for recreation purposes -- many times that property is eyed to be their permanent residence, once they take up golf full-time.

"That has a tremendous impact on many markets in the province -- the Kootenays, the Okanagan, even Kamloops, as well as some points on Vancouver Island [like] Qualicum Beach, Courtenay, Nanaimo."

The demand has sent the price of recreational properties soaring, particularly waterfront.

"We've seen a big run-up in those second home purchases the last few years," said Muir.

"Albeit this year we anticipate that demand is not going to be as strong, for a number of reasons. Number one, there may be some trepidation around the housing market, given [the] bad news coming from the United States, which may have some recreation buyers sitting on the fence.

"Also the impact of Alberta buyers this year will likely not be as strong. The housing market in Calgary is a pretty strong buyer's market right now, and that has a big impact on markets such as the Kootenays. In the east Kootenays, nearly 40 per cent of home buyers over the last year or so have been Albertans."

Albertans have been a big part of the surge in recreational real estate. Rudy Nielsen is president of Landcor Data Corporation, which tracks B.C. real estate sales.

"Alberta accounted for 6,300 sales [in 2007], about $2.1 billion," said Nielsen. "Forty-eight per cent of those sales came from Calgary."

The attraction? B.C.'s amenities, lifestyle and weather.

"We have golf, we have skiing, and we have fishing and boating," said Nielsen.

"And you can do all those things in one day in Vancouver, if you get up early enough. [Plus] you have the harsh winters of Alberta, and you don't have the nice views and things like that.

"Another thing that has really opened us up is things like WestJet going to Comox: It's an hour flight. You can [come in] from anywhere and land in Vancouver, and take a cab to the south terminal [where] you have one of the biggest float plane operations in the world. Those float planes go to just about every island, they go to Nanaimo, they go to Victoria, and they're going on a continual basis. So transportation is not really that big [a deal] anymore."

That said, it's the bigger resort communities in the province that are the big attraction for baby boomers.

"When you're newly retired and fairly young and ambulatory, a hospital may not be as big a consideration," said Muir.

"But as you're aging, it's certainly going to be an important factor. Communities in the province that have medical services, as well as other kinds of professional services that these aging boomers are looking for, certainly are going to benefit from that."

Nielsen said demand for recreational property goes up according to the proximity to cities like Vancouver, Calgary or Edmonton. A one-acre waterfront lot four hours out of Vancouver might cost you $800,000 to $1 million, but if you were willing to drive the eight or nine hours to Prince George, it might be $110,000.

Nielsen said recreational prices have "levelled off" this year, but in the long term, he expects demand to stay high.

"Remember, five per cent of the province is private, 95 per cent belongs to the Crown," said Nielsen, who can rattle off numbers like a machine gun.

"There's 1,800,000 titles in British Columbia. 1,350,000 titles are residential, which is condos [and] single family. You take the balance and take commercial and industrial off of that, you're down to less than 200,000 properties which we call recreational. There's not a big pot of recreational land out there."