Frank O'Brien ,Western Investor, June 2006
There are now apparently two truisms in Western Canadian real estate: Waterfront prices are too high. They will be higher next year.
“Waterfront is, and always will be, the very best real estate investment,” said uber Vancouver realtor Bob Rennie, president of Rennie Marketing Systems, who has been swamped with buyers trying to get into the Waterstone Pier condo development he is selling on the Fraser River near Richmond.
With prices from $369,900 for a one-bedroom facing the river, it looks like a deal for those leading a tsunami of buyers charging for the water, any water.
A Kootenay lake that was virtually ignored a decade ago because of poor access and a railway fringe now has buyers paying $20,000 a foot for its precious shoreline.
On Texada Island, once mostly an open pit mine with the scars to prove it, resident and realtor Linda Bruhn can only gape. “Prices have gone through the roof on the waterfront,” said Bruhn of the Islands, located off the coast of Powell River. “We have lists and lists of people waiting for waterfront. Those who are buying are largely rich city folk.”
The rich city folks, though, are having shocks of their own. The pre-completion prices for condominiums in the new Fairmont Estates high-rise on Vancouver’s Coal Harbour are in the $2 million range. “We have people throwing money at us,” Rennie told a CBC reporter when asked how the suites were selling.
How about Victoria, it has lots of waterfront? In March there were 22 sales of Victoria-area waterfront at an average price of $2 million. “These sales includes two in Oak Bay- one for over $10 million and one for just under $10 million,” said Victoria Real Estate Board president Scott Kendrew. The waterfront prices are now so high they are skewing house sales statistics, he said. “Such high-priced sales have a substantial impact on the overall average price,” he said.
How about driving east? In lake-starved, oil-rich Alberta a reservoir with a drainage ditch is now seen as prime waterfront, and values have rocketed faster than the price at the gas pump. At man-made Gleniffer Lake, near Red Deer, the last cottage lots hit the market this year and locals expect them to sell out in a day or so at $350,000 each.
So, what is an investor to do to fins the waterfront they know will be worth more the longer they hesitate?
Consider quarter-share purchases. These are becoming more common and, like condos 20 years ago, are meeting some resistance. But the caliber and the location of the latest projects is making them hander to ignore from a recreation and investment stance. The latest example is the new Painted Boat resort at Pender Harbour, where quarter shares will be offered in what early reports say will be the top resort ever built on the Sunshine Coast. Prices are in the $159,900-$260,000 range in the project by developer Lowes Marine Community Ltd.
“Quarter ownership is hassle free and a smart way to buy real estate,” said George Hare, president of Recreational and Residential Project Marketing Inc. “You own one-quarter of your marina waterfront villa. Buyers have complete private use when they need to get away.”
Fly, don’t drive
Think flying, not driving, advises Rudy Nielsen president of NIHO Land & Cattle County [sic] and one of the largest private land dealers in Western Canada.
Nielsen notes that water-access-only waterfront is a bargain, as is Cariboo lakefront that is a 10-hour-drive but only a short flight from the city. And, he adds, there are now scores of light plane charters available. “You can leave Vancouver and be anywhere on the coast in less than an hour.”
For example, Ed Handja of Coast Realty Group Campbell River has nearly 10 acres of waterfront on the West Coast of Vancouver Island in Barclay Sound listed for $150,000. This compares with $500,000 for the new 700 square foot condominiums in Ucluelet, a 30 minute boat ride away.
Jenkins Island, a 186 acre private island with seven beaches, three cabins and good moorage is also for sale. It is about 25 minutes by boat from Nanaimo or a few minutes by float place from downtown Vancouver. Price is $2.45 million, or about the same as a luxury condominium overlooking Coal Harbour.
The emerging Queen Charlotte Islands is another example. While large waterfront subdivision lots are now selling in the $250,000 range, there are scattered parcels at half that price. It takes a couple of hours to fly in from Vancouver or Victoria.
Near Williams Lake- a nine hour drive but just a 40 minute flight from Vancouver- LandQuest Realty Corp. was selling three acre waterfront lots for $25,000 this spring.
As Nielsen notes, “you could fly into a property every weekend and still save money compared to buying waterfront near Vancouver.”
Keep going, and you will get to bargain-priced Manitoba, where the government is having problems selling lakeshore lots for even $1500. (More on that inside).
In Saskatchewan, meanwhile, the closure of three local pulp mills in the Lakes District may mean bargain prices for lakefront this year.
So, there is still an opportunity to buy waterfront at a price you can afford. Take the plunge this year, because you know your grandkids will love you for it.