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Quiet Stampede

Andrew Findlay, BC Business  August, 2006

It's Friday afternoon and a convoy of sparkling sport-utes with Alberta plates, many of them towing trailers and powerboats, is squeezing through the ochre-coloured walls of Sinclair Canyon at the western portal of Kootenay National Park near Radium Hot Springs. The fuel pumps are on constant rotation in Radium on this sweltering summer weekend, the last pit stop for Calgarians making the weekly pilgrimage to their summer cottage on B.C.'s Lake Windermere.

Andy Smith, a Kootenay Real Estate Board director and  a Remax realtor, estimates that Albertans own nearly 50 percent of the land in and around Radium, Invermere and Fernie- longtime hotspots for Albertans on holiday because the towns fall within that critical three-hour driving radius from Calgary.

Things have changed. When you consider the influence bulging Albertan pocketbooks are having on B.C.'s already sizzling real-estate market today, driving distance is no longer a limiting factor. Cash-flush Alberta baby bookers who first discovered B.C. as a recreational destination are now swarming to Vancouver Island in droves with an eye to retirement. Thanks to a surging oil-and-gas economy next door that shows no signs of abating, the wave of real-estate investment cresting over the Rockies is gaining momentum. "Alberta is making all the money and B.C. is becoming their playground," says Rudy Nielsen, a ...developer whose real-estate research firm Landcor Data Corp. monitors the Alberta factor.

Examples abound. Rudy Nielsen, through his Niho Land & Cattle Company, plans to market five-acre oceanfront lots that he owns in the rain-drenched remote northern tip of Graham Island in the Queen Charlottes almost exclusively to Albertans.

The wealth in Wild Rose country is also being felt in the Comox Valley, a place that not that long ago-before the four-lane Inland Island Highway and the new Comox airport terminal were built- was a little known backwater, a locals-only Shangri-La of good, small town living. The AB-factor is also becoming a force in swanky, designer golfing communities such as Bear Mountain, the exclusive development a mere 20-minute drive from downtown Victoria that's co-owned by former Calgary Flames goaltender Mike Vernon, Rob Niedermayer and a handful of other retired NHLers.

"The oil patch and retiring Albertans are certainly having an impact on the provincial market," says Cameron Muir, a senior analyst with Canada Mortgage and Housing Corp.'s Vancouver office.

It's easy to understand why Vancouver Island appeals to the aging and moneyed Albertan: golf, lakes, ocean, ski hills, spas, cappuccino cafes and vineyards. Though some places on Vancouver Island have seen property value increases in 2005  up to 20 per cent, real estate on the Island is still considered by many analysts to be a bargain, largely undervalued by North American standards.

If you ask your average executive facing retirement from the Alberta oil patch what the future holds in his or her twilight years, shoveling snow and shuffling outside in a winter parka to plug in the block heater don't top the list. Try tuning up your golf game 12 months a year and soaking in a coastal climate the envy of Canada, where green thumbed retirees can grow cantaloupes if they so choose. Add to the fact that B.C. is being governed by a second-term Liberal regime that resembles the Alberta Conservatives more than any other political machine to have marched across the province's chaotic political landscape, and you can understand why lifestyle pilgrims from east of the Rockies now feel comfortable, politically and socially, on the "left coast".

While one Albertan slips into his flip-flops and sips a cocktail on his deck overlooking Lake Windermere, a  woman in smart business attire steps onto the tarmac at YQQ. Two years ago the Comox Valley airport moved from its claustrophobic, unremarkable trailer park digs to a sparkling new, upbeat terminal that seemed to signal the arrival of a refreshing, open-door attitude for this island community. From Cow Town, via a direct WestJet flight, it's a mere one hour hop to the Comox Valley. Safely on solid ground, the well-dressed woman collects her attache, steps outside into the Comox Valley summer sunshine and is greeted  by an eager realtor who leads her to a pristine black Lexus. Another so-called amenity migrant arrives to stake a claim on Vancouver Island.

Clearly, times are good these days for realtors in this increasingly  trendy community of 65,000 (considering the Comox Valley includes Comox, Cumberland, Courtenay and the surrounding rural areas). The depressing housing slump that characterized the mid-1990's and sent part time realtors packing by the busloads and scuttling for new occupations seems like a distant bad memory. The market is on fire. It's burning so hot that between 2004 and 2005 alone, housing prices surged on average 19 per cent. The days of the $100,000 fixer-upper are long gone, with entry level homes on city lots hard to find for less than twice that much.

In its latest buyer profile, the Vancouver Island Real Estate Board (VIREO) estimates that Albertans represent 12 per cent of buyers in its region, which includes the entire Island north of Victoria. It's a number realtors expect will continue to grow. "Sometimes they don't care what they buy. They just want to get into the market to keep up with inflation, then, when they retire and move out here they can sell and buy what they want," says Darrell Paysen, VIREO president and an agent based out of Duncan with Sutton Realty. "When I look out the window I think 'why wouldn't you want to live here?'"

It's a rather tired mantra that lifestyle-smug Vancouver Islanders used to utter conspiratorially over beers to an audience of nobody. That  was before the place was discovered. Now the Island is booming, but not because of any profound economic development or diversification; rather, it's being fuelled partly by people who make the money elsewhere- like the Alberta oil patch- and move here to spend it happily in their retirement.

Even cocky and confident Albertans admit their province can't offer what B.C. can in terms of lifestyle options. Most of our neighbour's scenic mountain scenery is sewn up by Jasper, Banff and Waterton Lakes national parks, as well as Kananaskis Country  on the eastern slope of the Rockies where development is severely, if not completely, restricted.

Developable land in Alberta resort hamlets like Canmore next to national parks is drying up. Conversely, John Sparrow, a Calgary-based realtor, looks at B.C. as a paradise of lakefront, mountain and oceanfront property awaiting the arrival of equity-rich Albertans. "Let's face it, not a lot of Albertans are looking at the prairies in Saskatchewan for resort properties," says Sparrow.

The blueprint for accommodating a wave of retirees and lifestyle pilgrims on Vancouver Island was set in motion years ago with  an infrastructure development plan to render the Island a less isolated place than it had been in the past. For starters, the four-lane, $1.2 billion Inland Island Highway was completed in the late '90's and allows drivers to bypass the serpentine and slow coastal route, reducing the trip from Victoria to the Comox Valley from five hours to less than three. Along the route a phalanx of billboards continually touts the retirement-friendly attributes of Vancouver Island. "Fairwinds: Live Here, Live More," and "Bear Mountain: Your course. Your resort. Your home. Or all of the above." Adding to its prestige, Vancouver Island's international profile has grown substantially thanks to gushing profiles in glossy travel publications like Conde Nast Traveller and Travel & Leisure.

Albertans are part of a growing cavalry of Island real estate conquistadors, and WestJet has provided the horsepower to get them to the market battlefield. Comox Airport handled 210,000 passengers in 2005, a three-fold increase from when WestJet first announced flights to Comox in 2000.  Today, Albertans account for 13 per cent of airport traffic, or 27,300 passengers annually.

On the outskirts of Victoria, a similar story is playing out. Last November, the champagne corks were flying at Bear Mountain Golf Resort Properties when, at the end of a single day of feverish selling, the developers tallied $140 million in premium condo sales, destroying the previous one-day record for the entire Greater Victoria Region. The sales binge also more than doubled Victoria's monthly record of $66 million racked up last spring. Of the more than 270 condos ranging in price from $205,000 to $949,000 that sold on  that legendary November 14, Albertans represented 30 per cent of the buyers.

They're coming for the golf, good weather, an exclusive, well-designed concept and, believe it or not, good prices. "Albertans are way less price-sensitive than Vancouver Island or Victoria buyers. We always thought of ourselves as a Whistler kind of place in that not many people who live there are from there," says Dale Sproule, Bear Mountain's director of real estate. "With the way the economy is moving in Alberta, we expect it to continue to be a strong market."

The developers are just one-fifth into completing their master plan, which at build-out will see 1,000 single family homes, 1,800 condos, 300 townhomes as well as two Jack Nicklaus-designed golf courses and 140,000 square feet of retail space crowding the 1,200 acre property that sprawls across Bear Mountain.

Sproule is so bullish on the Alberta market, that within the year, Bear Mountain plans to hang shingles in Wild Rose country and open a sales office in Calgary, and perhaps a second in Edmonton. And in a departure from its in-house development model, Bear Mountain has parceled out a chunk of raw land and sold it to Alberta-based Cove Properties- the first time it has outsourced a piece of Bear Mountain turf to another company for development.

"We were very interested in Victoria and wanted a property that commanded top-of -market value," John Sparrow, Cove's VP of sales and marketing told BC Business over the phone from his Calgary office. Cove hopes to break ground this fall on a 20-storey glass and concrete tower with 200 condos in the $500,000 to $1 million price range. Residents  will be able to tone up in the private indoor aquatic and fitness centre and  sip wheat-grass and carrot juice cocktails from the bar overlooking the 9th and 10th tees.

This is the second time that Cove has cast its eye and resources west over the Rocky Mountains into B.C. Its Playa del Sol property near Gyro Beach in Kelowna is 90 per cent sold out to a largely Calgarian and Edmontonian clientele, apparently breaking that three hour maxim (Kelowna is roughly six hours from Calgary).

"There are a lot of wealthy people in Alberta and an aging demographic with a propensity to purchase resort properties," Sparrow says. "B.C. is a natural place for Albertans to look to spend recreational time and recreational money."

Apparently so.