May 29, 2015
A rosy outlook for recreational properties
By MICHAEL BERNARD
B.C. realtors were holding their breath this past winter as they watched oil prices slump and Alberta’s economy take a nosedive. B.C. recreational areas have long been coveted destinations for Albertans looking to come in from the cold by retiring here. But first-quarter results from the British Columbia Real Estate Association are giving them a reason to relax. They show a steady improvement in prices, making March the strongest month in the past eight years and proving Alberta’s woes are having a minimal impact on the market.
One of the biggest surprises to emerge in the stats is the sleepy Sunshine Coast, just a 40-minute ferry ride away from the Lower Mainland. Prices, depressed there since 2008’s financial meltdown, are on the rise, reflecting what realtors say is renewed interest from Metro Vancouverites. “We thought there might be some negative impact [from Alberta’s economy] on markets such as Vancouver Island, the Okanagan and the Kootenays, but the numbers are not bearing that out,” said Cameron Muir, chief economist for the B.C. Real Estate Association. He credited rock-bottom interest rates and rising consumer confidence for the rosy picture.
The association’s multiple listing service (MLS) unit sales were up a whopping 33.2 per cent for the first quarter compared to the same period in 2014. Prices for the average MLS listing rose 8.7 per cent. The Alberta oil slump may, in fact, be having a countervailing impact as Alberta baby boomers decide this might be the time to cash out and move into retirement in B.C., said Muir. Vernon realtor Darcy Griffiths, past president of the Okanagan Mainline Real Estate Board, said she was worried two months ago, but is relieved that first-quarter figures showed Alberta buyers had dropped just two per cent to 16 per cent of all purchasers. At the same time, the proportion of local buyers had risen six per cent to 60 per cent, she said.
Realtor Karen Singbeil says vacation home sales have been brisk recently in the Shuswap Lake area; 2014 sales were her best in 19 years. Many of her sales are to people who already own property there and are buying up. “There are some new people, but it’s the people now here that already have the confidence and faith in the market that are moving around,” she said. Her advice to those considering a second home? Buy while the buying is good.
“With lower inventory here, prices have nowhere to go but up.” Joel O’Reilly, whose firm Brynelsen O’Reilly has been selling luxury waterfront properties on the Sunshine Coast for more than 30 years, says he has seen interest pick up in the region in the last few months. “We are busier now than we have been since 2008,” he said. “Many buyers who have been sitting on the fence are now making a purchase because they are realizing that the bottom of the market here may have come and gone.”
While first-quarter sales were down by 22 per cent to a total of 60 homes, average unit prices were up 16.3 per cent, the biggest price increase among the province’s 11 real estate board regions. “We are no longer losing buyers to the U.S. given the decline in the Canadian dollar,” O’Reilly said. “Many people who were buying in Palm Desert and Phoenix are not doing that any more. They are considering properties closer to home.”