Brian Morton, Vancouver Sun, June 18, 2012
There's renewed post-recession interest in B.C.'s recreational property market and it's largely from young families attracted by lower prices, according to a RE/MAX executive.
“The local market has softened and prices have come down because of that,” said Elton Ash, regional vice-president, RE/MAX of Western Canada, of the RE/MAX Recreational Property Report 2012, which concluded that lower prices have stimulated interest with modest increases in sales in all regions except the North Okanagan, which was off last year's pace following a slow start to the season.
“The baby boom demographic has been investing their recreational dollars in Arizona and California rather than B.C. But younger families are confident in buying here because prices have softened. They really want to improve the quality of family life.”
According to the annual report, which looked at trends in 33 markets nationally, lower prices have stimulated interest with modest increases in sales in all regions of B.C. except the North Okanagan, which was off last year's pace following a slow start to the season.
Ash said buyers are still cautious, but that market conditions including lower interest rates have placed them in the driver's seat with activity also prompted by pent-up demand that's been building since 2008 – when many shifted to the sidelines.
He also noted that inventory levels are adequate, allowing buyers to take their times before buying.
Many of the buyers are seeking properties off the water, with renovations of older cottages common.
According to the report, prices are not only down from 2009, but also generally down from 2011.
In the North Okanagan, the starting price for a three-bedroom winterized recreational property on a standard waterfront lot was $900,000 in 2012, down from $1.2 million in 2009 and $995,000 in 2011.
In the South Okanagan, the same property sold for $800,000 in 2009, $800,000 in 2011 and $610,000 in 2012.
However, that property in Cultus Lake rose from $450,000 in 2009 to $800,000 to $1 million in 2011, and $650,000 in 2012.
On Vancouver Island, prices rose slightly from $789,000 in 2009 to $825,000 in 2011 and $795,000 in 2012.
On Salt Spring Island in the Gulf Islands, prices dropped sharply from $890,000 in 2009 to $669,000 in 2011 and $597,000 in 2012.
In Whistler, the starting price for a mountain chalet also dropped sharply, from $750,000-to-$800,000 in 2010 to $669,000 in 2011 and $597,000 in 2012.
Regionally, Ash said that prices have dropped in the Gulf Islands partly because Americans are buying there in lesser numbers, while the Shuswap and areas closer to the Alberta border have stabilized because of a moderate increase in interest from Albertans.
In Whistler, he said, there's less interest from both European and U.S. buyers, with many of the sellers also Americans trying to unload their vacation properties.
For the North Okanagan, the report noted that despite significant price reductions (down 30 per cent from peak levels in 2007/08), activity has been slow.
“Weather's played a part,with plenty of rain dampening purchaser enthusiasm this spring,” the report concluded. “The market has lost a fair share of recreational/investor buyers to the southern U.S., taking a bite out of the boomer/retiree purchasing pool.
“The bulk of those making their moves now are Albertans — most with young families. To that end, there is optimism that sales will improve along with the weather, given Alberta’s positive economic outlook.”
Meanwhile, Rudy Nielsen, president of NIHO Land and Cattle Company , which specializes in recreational land purchases, development and sales, agreed that sales are up this year with lower overall prices.
“It's increased from last year, but it's still not where it was,” said Nielsen. “Everything can be negotiated. There's some good buys.”
Nielsen said while most buyers are B.C. based, there's also renewed interest in some properties from European buyers. “And for the first time, we're seeing Chinese money in oceanfront properties.”
He said many Metro Vancouver residents have sold their homes at a profit over the past two years and used some of the money to buy a vacation home in the interior.
Nationally, the RE/MAX report found that Canadian recreational property markets have been reinvigorated in 2012, with softer values, more selection, and a rebound in consumer confidence contributing to an upswing in sales.
It said sales were ahead of last year’s levels in 70 per cent of communities examined, while six per cent were the same as 2011.
It said that lower prices were recorded in 49 per cent of markets, while 33 per cent experiencing no change and 19 per cent seeing an increase year-over-year.
The report concluded that sales were healthiest for properties under $400,000, although demand for luxury product over $1 million has also seen renewed interest in several markets.