May 25, 2018
Out of Town Properties: The Island beckons
The lifestyle continues to lure new owners even as its sizzling market begins to cool
By Michael Bernard
Vancouver Island’s real estate markets have pretty much followed the path of other regions of the province, buffeted by a number of headwinds, including the foreign buyers tax, among other measures designed to pacify last year’s harried housing market.
But a closer look shows some surprises. There are still some bright spots where attractive prices continue to attract first-time buyers and Metro Vancouverites looking to escape the city. There is also at least one developer/tourism operator for whom new speculative and foreign buyers’ taxes are wreaking havoc on a business model designed to build tourism and create new jobs.
“It’s still a relatively strong market,” says Kyle Kerr, this year’s president of the Victoria Real Estate Board. “There is still a strong demand for Victoria property because of lifestyles and opportunities.”
Demand is beginning to moderate somewhat during this year’s first quarter after prices jumped by an average 20 per cent over the last two years, he says. “Even though demand is slowing down, last month 35 per cent of homes still sold for full list-price and above.”
Filling a need
Meanwhile, 16 kilometres west of Victoria, developer Westhills Land Corp. is still seeing a steady stream of buyers for homes in its master-planned community in Langford, says Dale Sproule, the company’s real estate sales and marketing manager.
“We’re busy. Things haven’t tailed off for us at all,” he says. Westhills’ plan calls for a build-out of some 5,000 homes in a community of 30,000 people that the last census found was the fifth fastest growing in Western Canada. The developer is finding a broad mix of buyers ranging from downsizers and retirees to first-time homebuyers.
Westhills’ secret to success is diversifying its housing product, producing single-family homes and now venturing into multi-family homes, including 116 units in a 17-storey concrete high-rise. “Langford’s first,” he says, adding, “We have also gone into small-footprint homes, about 1,390 square feet on strata lots with rooftop decks with a price under $600,000.”
Over on the Island’s west coast, the 21-unit Sea Otter Place in Tofino has enjoyed strong sales this year and is close to selling out its 1,500-sq.-ft. three-bedroom, two-bathroom strata homes, says Lyle Jenish, marketer and spokesperson for developer Tim Hackett. Jenish says the project, the first of its kind and size in several years, fills a housing need for both those who work in Tofino’s luxury tourism industry as well as local professionals.
In Qualicum Beach, on Vancouver Island’s east coast, managing broker Darryl Weigand at Re/Max Realty Beach says the retirees are still being drawn to the seaside resort town’s charms, which include golf courses and one of the best beaches on Vancouver Island.
“We are seeing about the same level of activity as last year,” he says. A townhouse there starts in the mid-$300,000s while a single-family home starts at about $600,000.
Caught in the middle
While some developers have escaped the negative impact of various new taxes, Sooke Point at Silver Spray developer Michael Thornton has found his 95-unit project has been inadvertently stymied by the new measures.
Many of his buyers bought into the homes overlooking the waves west of Victoria intending to have them serve as both a vacation home and an investment by putting the homes in a rental pool administered by Thornton’s company. Instead, they are being subjected to the speculative tax and restrictions on short-term rentals, effectively upending a business model that could potentially provide hundreds of tourism jobs.
“What they are saying is if you don’t rent out the homes to someone long-term for more than six months of the year, we’re going to tax you,” Thornton says.
So far, all he has received are thank-you letters from the provincial government for his protest missives, cold comfort in what started as a promising economic generator, he says.