Martin Crutsinger
USA Today

The National Association of Realtors said Friday that single-family home sales dropped 1% to 4.89 million units, matching the all-time low set in January. These records go back to 1999.

Inventories of unsold homes surged 10.5% to 4.55 million units at the end of April. At the current sales pace that would put the supply of homes at 11.2 months’ worth, highest since the association began tracking single family and condo properties together in 1999.

For single family homes, at the current sales pace there were 10.7 months’ worth, the biggest supply since June 1985 when it stood at 11.4 months.

The April sales drop was slightly smaller than had been expected. The housing industry is being battered by a prolonged slump that has seen sales and prices decline and mortgage foreclosures soar, the aftermath of a five-year housing boom.

The median price for an existing home dropped 8.5%, compared to a year ago, to $200,700. Analysts predicted further price declines given the huge backlog of unsold homes.

Twice as many Americans expect the value of their homes to fall in the next 12 months than a year ago, while price rises in the next five years will fail to keep pace with inflation, according to a survey released Friday.

The Reuters/University of Michigan report is the latest indicator of grim sentiment among consumers, who have been hit hard by the worst housing slump since the Depression, record energy costs and a shrinking job market.

The results showed the proportion of respondents who expect their home’s value to decline during the year ahead rose to 28%.

Considering the record declines in home prices in recent months, 28% might seem mild, but it is double the 14% registered in a survey a year ago, showing how deeply seated the negative sentiment has become.

“The data underscore the self-perpetuating dynamic now tilted toward declines,” the report said.

The survey data was based on telephone interviews conducted in late April and early May with 392 people.

It showed just 17% anticipated that the value of their homes would increase, vs. 35% recorded a year ago. Homeowners’ expectations for the longer term have also deteriorated.

The proportion of homeowners in May anticipating increases in house prices in the next five years fell to 58% from 65%.

The news gets worse when inflation is factored in. The average annual gains they expect over the next five years slid to 2.5% from 3.9%.

Consumers’ five-year inflation expectations, which rose this month to 3.3%, according to last week’s Reuters/University of Michigan consumer confidence report. That was the highest level of five-year inflation expectations since August 1996.

Sales were down the most in the Midwest, a drop of 6%, followed by a 4.4% decline in the Northeast. Sales were up 6.4% in the West, a region of the country where prices fell by the sharpest amount, and were unchanged in the South.

Even with the weak results for April, Lawrence Yun, chief economist for the Realtors, said he saw reasons for optimism for the second half of this year as more types of mortgages become available as industry and the government respond to a severe credit crunch that began last August.

“I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said.

Details of contract are where you’ll earn or lose money

Tony Gioventu
Province

Dear Condo Smarts: Our family purchased five rental-pool townhomes in a resort complex in Parksville in 2002.

At the time, the promoter indicated our annual returns would be eight to 10 per cent of the value of our property. Obviously times have changed and the value has skyrocketed, but the returns have either stayed at a flat line or dropped with the reduced number of overnight bookings.

We’ve decided to sell three of our units and contacted the strata corporation to provide us with bylaws, financial records and copies of the rental-pool agreement.

Somehow, we were given the documents for other units with financial reports showing that the other units were receiving far greater return on their investments. The president, vice-president and treasurer of the strata council were part of this group and have received five times the financial returns that we ever saw. Can directors administer the rental pool for their interests without reporting it to the owners of the strata? We now have a lawyer involved but the business of the strata is intimately woven into the rental pool and it’s going to take years to sort out the mess. What’s our next step?

— CF

Dear CF: You are taking the correct action. Have the program audited, your contract reviewed and seek to recover your losses.

A rental pool in definition implies that all the expenses are applied to all the revenues of every unit in the pool.

Then the funds are distributed to the rental-pool investors based on the rental-pool agreements that are usually set by the size and number of bedrooms of a unit.

The other side of the rental pool is the management or operations agreement. While you may be in a pool that has a 50-to-70 per-cent occupancy rate, the management and booking commission rates may be so high and uncontrollable that you see little or no return.

Don’t forget to review the table of costs and disbursements.

What kind of bills could you be potentially facing?

The contract expenses may include almost anything: Booking fees, advertising, management, accounting, security, maintenance and operations in addition to strata fees, insurance, computer upgrades and entertainment can all be added to the costs.

Before you enter into a rental pool or buy a rental-pool property, talk to your lawyer and review the contract closely. The financial reports shown to potential buyers are best-case scenario and may not reflect the contract. The details of the agreement are where you will earn or lose your money.

Strata business and rental business should be entirely accounted for separately — unless it is the strata that owns and operates the rental-pool business. Even under those circumstances the strata business and the rental-pool business need to be accounted for separately.

Tony Gioventu is executive director of the Condominium Home Owners Association. E-mail: [email protected]

© The Vancouver Province 2008

Smart use of materials, windows and mirrors creates a sense of space

Kate Webb
Province

When 1212 Howe went on sale in downtown Vancouver two weeks ago, there was a lineup of anxious home-hunters down the block.

Not only were there 112 suites selling for less than $400,000 at trend-central between the West End and Yaletown, but the unique angular layouts and panoramic views from the suites in the 20-year-old reconstructed highrise are virtually unheard of in today’s newer, boxier condos.

“People lined up a day in advance,” says Tracie McTavish, marketing director for the 18-storey, 150-suite retrofitted concrete tower at Howe and Davie. “We have some really unusual angles and different architecture features.”

The secret to the developer’s selling spree has been the compact floor plans of the units. The 29 suites still left after the initial buying blitz range in size from 519 to 915 square feet, making them some of the most affordable on the downtown market.

“The buyers are a total melting pot, from first-time buyers to investors to empty-nesters, and culturally they are totally across the board,” says McTavish.

“The suite size has created an affordable environment, and Wall Financial made a commitment to build a quality product.”

The new developers of the building, which was originally built as a rental apartment complex, have stripped it down to the skeleton, and are completely rebuilding using the old floor plans, but all new materials.

“The [original] developers weren’t concerned with [space-efficient] shape and design; you would never do it like this today because it’s not cost-effective,” McTavish explains.

Cramped quarters in Vancouver‘s already dense urban core might sound like a turn-off to some.

But the interiors of these multifaceted gems positively shine with bright, unobstructed daylight.

Where the affordable floor space ends, the generous windows begin, stretching the full length of the apartments’ outer walls — an especially impressive feature when you see the corner units.

In the one-bedroom display suite on the 16th floor, views pan almost 270 degrees, from the bustling, east-facing Howe Street past north-facing views of English Bay and the North Shore mountains, all the way to southwest views of the edge of downtown from the living room and balcony.

“The bedrooms get views, the living rooms get views, and it allows you to get two bedrooms in a fairly small space,” says McTavish of the almost symmetrical two-bedroom display suite, which boasts ensuite bathrooms adjoining both bedrooms despite its modest 758 sq. ft.

The same unit offers a large, retro-looking half-octagon-shaped balcony, with more than enough elbow room to plant a barbecue, some lounge chairs and a mini-garden out there.

From that spectacular perch, one can watch traffic streaming over the Granville Street Bridge or tilt the gaze down to where a community garden half a city-block long will soon be blooming on a deck attached to one of the building’s lower floors.

“The garden will have breakaway areas where you can go and sit and read a book or go and lie in the sun,” says McTavish. “I like that Granville Street bridge view down below. It’s sort of camp and cool.”

The building’s core may have racked up a couple of decades, but the brand new textiles used to refurbish it are sure to please even the most demanding buyers.

Kitchens sparkle with stainless steel appliances, granite countertops (which carry on in the bathrooms as well), porcelain tile floors, pot lighting in the ceiling and laminate cupboards that coalesce with one of the two neutral colour schemes: cappuccino and espresso.

Tight living-room layouts make the most of the space by offering a dining nook in the two-bedroom suites and a kitchen island that doubles as a noshing bar in the one-bedroom units.

The bedrooms offer exactly enough space in which to comfortably fit a queen-size bed, and the rooms appear bigger through the smart optic trick of floor-to-ceiling mirrors installed on the closet doors.

The necessities of life are all at hand, from in-suite laundry in all the units to an underground parking stall included with most of them — and amenities such as Fitness World and Tim Hortons are right in the building.

It’s easy to see what attracted the dozens of keeners.

Move-ins are slated to begin in August and a handful of units under $400,000 are still for sale.

THE FACTS

What: 1212 Howe, a retrofitted 150-unit, 18 storey condo highrise.

Where: 1212 Howe St., Vancouver.

Developer: Wall Financial Corp.

Sizes: One- and two-bedroom units, from 519 sq. ft. to 915 sq. ft.

Prices: $339,000 to $829,000

Open: Presentation centre and three display suites open at 756 Davie Street from 12 to 5 p.m. Saturday to Thursday.

More info: Visit www.1212Howe.com

© The Vancouver Province 2008

 

There are enough snags without creating any of your own

Paul Luke
Province

Here’s some fail-safe advice for smart homeowners who want to do a renovation fast and cheap.

Strike a verbal deal with the lowest-cost builder who comes along. Pay cash under the table.

Keep your plans loose so you can improvise as you go along.

Better yet, do all the renovating yourself. You can cover your tracks at the office if the job pulls you away a few hours a week.

Don’t worry about permits and inspections from your municipality — they’re for fools.

Congratulations– you’ve just turned your dream project into a nightmare.

Earlier this month, speakers at a seminar organized by the Greater Vancouver Home Builders’ Association outlined disasters that await careless or ethically relaxed households.

“Renovations are notorious for growing and changing as the project keeps moving along,” renovator and Kelrek Services boss Alvin Epp told those at the seminar.

“There’s always something in a renovation that doesn’t seem to work quite the way you want.”

Looking to turn hiccups into screwups? Here’s some guidance from professionals at the seminar.

Support underground economy

Cash deals that lack liability insurance and WorkSafe B.C. coverage put homeowners at enormous risk, home builders association CEO Peter Simpson said.

“Without a building permit and the requisite inspections, you’re really exposing yourself,” Simpson said. “If anything goes to court, you, as the homeowner, are deemed to be the contractor.”

Dan Moseley, a lawyer with Surrey-based McQuarrie Hunter, said all agreements should be in writing. Key elements to anticipate are delays and disputes.

“There should always be a term in the contract or agreement which sets out a very simple process for dealing with extras, additions or changes,” Moseley said.

“Alternative dispute resolution, mediation and arbitration should be considered.”

Always choose the lowball price

Contractor Robert Capar, president of maison d’etre construction, said homeowners should be wary of a contractor whose quote is drastically lower than the rest.

“Make sure you’re getting a price for the same job — the same look, the same quality, the same materials,” Capar says.

CCI Renovations president John Friswell said homeowners should not base the cost of an item on a price they see in a store. A builder’s markups include indispensables such as planning, delivery and installation.

These may translate into markups of 25-50 per cent, depending on the job.

“If you get a contractor quoting you 10 per cent, be very careful,” Friswell warned. “Because that contractor is not adequately covering his costs if he has a legitimate business.”

Friswell tells clients to build a cushion of 10 to 20 per cent into their budget to cover changes and unforeseen costs.

Don’t bother with a professional

Homeowners able to handle the practical parts of doing a big reno must also be prepared to cope with the demands on their time, Capar said.

“When you’re running a project, it’s not uncommon to find that it’s taking two to three hours a day. You can do it yourself, but you’ll take on all the risk, all the liability.

“So trying to hold down a full-time job and run a project at home is not necessarily going to be the easiest thing to do.”

Keep cards close to your vest

Homeowners should be upfront during initial talks with builders about how much they can spend on a project, Capar said.

“Give them a sense of the budget,” he said. “That’s going to tell me the kind of finishing you’re thinking about, what kinds of details you’re probably going to be putting into that project.”

Homeowners also need to be clear about their timelines. Pregnancies are one of the single greatest triggers for renovations in Vancouver, Capar said.

“If the baby’s due in three months, make sure that’s clear,” he said. “Because if [a builder’s] schedule is eight months out, you should know that so you can eliminate each other.”

Fly by the seat of your pants

Interior designer Daine Halley said people must do their homework and build up enough knowledge to survive the blizzard of design decisions.

“Make a plan and stick to it to keep a project from becoming a reno horror story,” the owner of Comet Interior Design said

© The Vancouver Province 2008

 

There’s a growing number of listings, but don’t expect fire sales

Gillian Shaw
Sun

Want a good deal on a marina? Now could be the time, with the “for sale” list stretching from the southern Gulf Islands to fishing resorts up the coast.

But don’t expect fire-sale prices, despite skyrocketing fuel costs, a strong Canadian dollar, and a weakened economy across the border all contributing to declining tourist visits to Canada.

Marinas have a lock on oceanfront, a consideration that gives them a value beyond their business operations. And with moorage waiting lists stretching into years, even if daily traffic slows there will always be boaters looking for long-term stays.

However, Rudy Nielsen, president of Landcor Data Corp. which tracks B.C.’s real estate deals, said nervousness in the economy could have some owners deciding to cash out before cash flow falters.

“I’ve been in the business, and there are always marinas for sale,” he said. “It is like an apartment — you fill the whole thing with tenants, and then sell it based on the cash flow.

“You try and sell them before there’s a bad time and all of a sudden you have empty spaces. There are a lot of people who are nervous out there.”

It’s not nerves, but rather a lifestyle choice that is behind Montague Harbour Marina’s billing of a “once in a lifetime opportunity” for potential buyers to tender offers.

Marilyn Breeze, who runs it while her husband Graham is in Seattle, said she’s ready for a change after eight years of ownership.

“I understand that virtually everything is for sale up the coast. That’s what I understand from the marinas,” she said in an interview.

Montague Harbour Marina is on Galiano Island, alongside a provincial campground and in a well-protected natural harbour that, combined with its gas docks, a restaurant and a store, draws people to its docks. It’s also close to a number of water-access-only summer homes, so docking spots are in demand.

“It is one of the best harbours, and it is one of the best locations,” said Breeze. “We have had a lot of interest, and we want to sell it.”

Breeze said the family won’t list the marina with a broker but will sell it on their own, at a price close to $3 million.

With moorage in short supply all along the coasts, Breeze said she could fill her marina with annual moorage, but instead keeps spots open for seasonal transient visitors.

“I think the further north you go, if people are relying solely on guest moorage, on the transient moorage, then they have a problem,” she said. “When the fuel prices went up and the recession started getting bad for the Americans, we still did okay because they’ll come over the border to the nearest place.”

For each of the marina’s past two fuel deliveries and a diesel delivery, prices are up 15 cents a litre, Breeze said. For the mega yachts, the added fuel costs might be small change, but not for the less-well-heeled boaters.

“The people it knocks out for us are the people who come out for the day from Crescent Beach. They come out in their speed boat for the day for lunch. Those people will probably be thinking twice about it,” she said.

Real estate investment consultant Ozzie Jurock knows firsthand just how rising fuel has impacted the cost of running a boat. Two years ago, it took $1,000 to fill the tank on his 46-foot Carver motor vessel Proper Tee. Now he said it costs $2,000, and if fuel prices double again he could be facing a $4,000 fill-up.

“I am a boater. I live on the water in the summer. And last year, the marinas I was at in Desolation Sound were saying there are fewer Americans here,” he said. “That seems generally to be the trend.”

Jurock said a marina can be a good investment if you like the lifestyle.

“If you are young and you like the lifestyle and you don’t mind the hours, I think it can still be a good income,” he said. “The hours to operate a marina are something else — it’s like a motel.”

Added services are important to success, he said, like whether or not there’s a store and a coffee shop as well as fuel.

The priciest marina listing in the Gulf Islands is Port Browning on Pender Island, a 5.33-acre waterfront parcel with an 80-berth marina that is listed at $5.9 million. It has zoning approval for 39 units, a key factor in the pricing, according to Emil Chervatin, an agent with Pemberton Holmes who has the listing.

“The thing with Port Browning is we are not really just trying to sell the marina,” Chervatin said. “The value is in the land that can be developed. The marina is more an amenity.

“I don’t think anyone is going to buy a marina for $6 million. It is more about what can be built there.”

Richard Osborne, president of LandQuest Realty Corp., said that while the higher price of fuel won’t hurt travel by larger yachts, other boaters may not go as far as they otherwise would.

“The big boats that travel between Seattle and Alaska, the serious big guys, they’re not going to stop because of the price of fuel,” he said.

“The theory is that [other] people won’t go as far, and they may stay at marinas longer. People aren’t going to quit boating, but I think sailboat sales are going to skyrocket.”

Osborne’s company recently sold the Naden Lodge, a commercial sports fishing lodge on the oceanfront in Masset Harbour in the Queen Charlotte Islands listed at close to $1 million. LandQuest is also listing two other marinas — one in the Gulf Islands, and one on the Sunshine Coast — as well as Rivers Lodge, a floating fishing facility, at a price tag of $1.695 million in the Rivers Inlet region of B.C.

“The advice we are giving people, because we are in the kind of market we are in, is if you want to sell it you absolutely have to list it at the right price,” said Osborne. “There is no use being out there looking for pie in the sky. If it isn’t priced right, you can’t sell it”

Osborne said since operating a marina is a lifestyle choice, the slowing of the market may have made sellers decide now is the best time if they want to get out.

“Maybe people have realized the market has peaked, and they think maybe they should have sold a year or two ago. But now there is no use holding it because it’s not going to continue to go up like it has been,” he said.

“People maybe weren’t selling because the price of real estate was appreciating so fast they thought, ‘I might as well stay here and ride things out’.”

Fulford Harbour Marina, another LandQuest listing, almost sold recently, but the deal was delayed when a winter storm caused damage that had to be repaired and the buyer moved on to another waterfront property.

Jason Zroback, who has that $2.5 million listing, said if just the business operations of a marina are taken into consideration, it can be difficult to find one that makes good financial sense. But the value of the waterfront real estate, which has risen far faster than revenue from operations, gives them investment value.

“In some cases, there is more upside to a property than strictly the operations of a marina,” he said. “I guess the sentiment for these types of properties is that they are desirable, they are prime waterfront real estate, it is a supplemental income, and a safe place to park your money.

“We know there is a huge shortage of dock space around the entire coast. Places are full up, and I don’t think that’s going to go away.”

ALL SHIP SHAPE

Number of marinas in British Columbia: 824

2004: 19 sales

2005: 27 sales

2006: 21 sales

2007: 22 sales

2008 first quarter: 6 sales

Source: Landcor

© The Vancouver Sun 2008

 

Projects win praise for modern design, green construction

Frances Bula
Sun

The corner of First and Main in Vancouver is home these days to a sad-looking Burger King, a muffler shop, a tire store, Buster’s Towing and a steady stream of commuter traffic.

It’s not a place where you’d expect to find an architectural diamond.

But there will be one three years from now, when an unusual new building will rise on that corner. It will be a model of green architecture and innovative design, with an unusually rich exterior texture, in sharp contrast to the city’s ubiquitous all-glass towers.

It’s a building to which the city’s in-house jury of architecture critics — the urban-design panel — didn’t just give the usual approval recently. It also commended it as an exemplary project, with its repetitions of simple cubic forms, its graceful garden and common spaces, and the way its elevator will deliver incoming residents to a landing where they can look out over the downtown skyline.

That kind of praise doesn’t often come from the panel of architects, landscape architects and engineers who’ve been bombarded with mediocre designs in recent years as condo mania has run full-throttle in the city.

Besides its location, there’s another surprise to this building: It will be a home for 100 of the city’s most troubled citizens, its drug- and mental-illness-plagued homeless.

And then there’s a third twist.

It’s not a one-off, like Arthur Erickson’s building for the Portland Hotel Society on Hastings or Gregory Henriquez’s award-winning Lore Krill Co-op on Cordova.

Instead, this building is just one of what promises to be a wave of beautifully modern, environmentally cutting-edge buildings. It’s one of the almost two dozen projects the provincial government has committed to in a massive pre-Olympics social-housing boom in Vancouver, Surrey, Victoria, Kelowna and Nanaimo.

Two other Vancouver social-housing projects also passed through the urban-design panel recently. They too won praise for strikingly good design that, with their panels and use of colour, is faintly reminiscent of the city’s unique BC Electric tower, built in 1957 in the full bloom of modernism.

The two new projects — one at 1308 Seymour, the other at 1237 Howe — are part of a package of 12 buildings to go up in Vancouver over the next several years.

“They really are little gems” is how one panel member, architect Walter Francl, describes the models that are starting to appear at city hall for approval. “And they show a real respect for the community they’re serving. They are quite ennobling for a group that is generally not given that level of care.”

So why is this happening? One might be tempted to speculate that the province wants some model projects to show off to visiting reporters during the 2010 Winter Olympics to forestall criticism of the city’s large homeless population.

But the changes are actually driven by a different provincial mania than the Olympics. These buildings are among the first government construction projects to fall under the province’s new mandate to achieve LEED Gold standards and near-zero greenhouse-gas emissions.

Having to meet those environmental standards pushes all the architectural teams to incorporate certain elements into their designs. A green building typically requires less glass because glass produces heat loss.

Usually, the walls are no more than 40 per cent glass; the windows are punched in. Think of the way buildings used to be built, with rows of windows set into brick walls.

The insulation has to go on the outside, so that means the exteriors are covered with materials like brick, clay tiles or Swiss pearl. (Swiss pearl is a kind of concrete, but the name tells you what higher-quality concrete looks like.)

Green design means taking advantage of natural light as much as possible, so there are skylights that flood interior hallways with light. To take advantage of the differing amounts of sunlight they get, each of the four sides of the building has a different design.

Finally, because these projects will be built on small sites and because the builder, BC Housing, isn’t asking to maximize the density, they’ve got an unusual shape for Vancouver these days. Instead of being sky-high skinny towers on flatbeds of stacked townhouses, they’re solid rectangular buildings of about 10 storeys.

“The scale is really pleasing to the eye,” says Tom Bell, the architect of the First and Main project.

“It’s not the huge project that you would typically see in Vancouver,” said Bell, a partner in the firm Gomberoff Bell Lyon. “And the interest comes because we’ve been free to design them, we’ve been able to respond to the orientation. When you walk about the Main project, no two sides are the same.”

All of this makes them remarkably different from previous eras of Vancouver social housing, from the postwar military-type public housing at Little Mountain to the co-ops of the 1970s and the social housing of the ’80s and ’90s, much of which consisted of four-storey wood-frame buildings.

Alice Sundberg worked in the social housing field for three decades in Vancouver before retiring recently. She remembers the changes.

“There was an era of ‘build it fast, quick and dirty.’ That ended up with some real problems.

“Then the response to that was building really high-end, and there was not so much of it.

“In the ’60s and ’70s there was a lot of emphasis on making the buildings fit in so it wouldn’t look like social housing. The problem now is they’re not getting the money to maintain those buildings, so they are starting to not blend in.”

The aim now is to ensure that they blend in and their high quality will endure.

“It’s a whole different housing type,” says Bell. “Previous buildings had a look of social housing.”

The environmentally driven changes are being accompanied by other changes that reflect the people who will live there. The rooms are small, so intense care is being taken with how each small space is put together.

Equal care is being given to the many common areas — essential for people who need to be able to alternate between places to be together and places to get away from one another.

Some of the buildings incorporate dining rooms and kitchens set up to serve communal dinners. The many common areas are a mix of big rooms for crowds and spaces big enough for just a few people.

That’s partly driven by suggestions from future residents.

Part of the design process for the First and Main building, which will be run by Lookout Emergency Aid Society, was to bring in people who live in some of Lookout’s residences in the Downtown Eastside to make suggestions about what the building should include.

It all sounds like a humanitarian paradise.

But, as always, there is one lead lining to this silver cloud: money.

There has always been a delicate balance that the province’s housing authority managers try to strike. They aim to build housing that lasts far longer than market buildings. And they want something that fits into the community.

Larry Adams, who designed the Seymour Street building, said architects often try to make the case that this is one kind of government service where there shouldn’t be any skimping.

“These people are marginalized already and they deserve nice homes,” said Adams, of the firm Neale Staniszkis Doll Adams.

But no group is more wary of accusations about gold-plated government buildings than government bureaucrats. And, ultimately, budgets have limits.

“We are being challenged on them by BC Housing because they are concerned about the cost,” admits Stu Lyon, who, like Tom Bell, is an architect with Gomberoff Bell Lyon. He designed a 110-unit building on Howe, between Davie and Drake.

BC Housing promises the quality won’t be undermined by “value engineering,” the current construction lingo for cost-cutting. Craig Crawford, its vice-president of development service, said the goal is to try to preserve the original concepts as much as possible. The agency is bringing in the cost consultant and construction managers early for suggestions on ways to save money without altering materials or design. Sometimes, just changing the construction schedule can make a difference.

“We don’t want to promise something to the urban-design panel that we don’t think can be built,” says Crawford. “I personally am really pleased with what they’re doing and their collaborative approach to design.”

In a couple of years, when the buildings start going up, we’ll know how all of that worked out.

© The Vancouver Sun 2008

Retirement lures people from Lower Mainland

John Mackie
Sun

B.C. – People have been cashing out of the Lower Mainland and seeking the good life on Vancouver Island, the Okanagan or the Sunshine Coast for decades. The trend has only increased in the last few years as the baby boomers flex their financial muscle.

“Certainly the recreation market has been led by the baby boomers entering or nearing their retirement years,” said Cameron Muir, chief economist for the British Columbia Real Estate Association.

“They’re looking for recreation property not just for recreation purposes — many times that property is eyed to be their permanent residence, once they take up golf full-time.

“That has a tremendous impact on many markets in the province — the Kootenays, the Okanagan, even Kamloops, as well as some points on Vancouver Island [like] Qualicum Beach, Courtenay, Nanaimo.”

The demand has sent the price of recreational properties soaring, particularly waterfront.

“We’ve seen a big run-up in those second home purchases the last few years,” said Muir.

“Albeit this year we anticipate that demand is not going to be as strong, for a number of reasons. Number one, there may be some trepidation around the housing market, given [the] bad news coming from the United States, which may have some recreation buyers sitting on the fence.

“Also the impact of Alberta buyers this year will likely not be as strong. The housing market in Calgary is a pretty strong buyer’s market right now, and that has a big impact on markets such as the Kootenays. In the east Kootenays, nearly 40 per cent of home buyers over the last year or so have been Albertans.”

Albertans have been a big part of the surge in recreational real estate. Rudy Nielson is president of Landcor Data Corporation, which tracks B.C. real estate sales.

“Alberta accounted for 6,300 sales [in 2007], about $2.1 billion,” said Nielson. “Forty-eight per cent of those sales came from Calgary.”

The attraction? B.C.’s amenities, lifestyle and weather.

“We have golf, we have skiing, and we have fishing and boating,” said Nielson.

“And you can do all those things in one day in Vancouver, if you get up early enough. [Plus] you have the harsh winters of Alberta, and you don’t have the nice views and things like that.

“Another thing that has really opened us up is things like WestJet going to Comox: It’s an hour flight. You can [come in] from anywhere and land in Vancouver, and take a cab to the south terminal [where] you have one of the biggest float plane operations in the world. Those float planes go to just about every island, they go to Nanaimo, they go to Victoria, and they’re going on a continual basis. So transportation is not really that big [a deal] anymore.”

That said, it’s the bigger resort communities in the province that are the big attraction for baby boomers.

“When you’re newly retired and fairly young and ambulatory, a hospital may not be as big a consideration,” said Muir.

“But as you’re aging, it’s certainly going to be an important factor. Communities in the province that have medical services, as well as other kinds of professional services that these aging boomers are looking for, certainly are going to benefit from that.”

Nielson said demand for recreational property goes up according to the proximity to cities like Vancouver, Calgary or Edmonton. A one-acre waterfront lot four hours out of Vancouver might cost you $800,000 to $1 million, but if you were willing to drive the eight or nine hours to Prince George, it might be $110,000.

Nielson said recreational prices have “levelled off” this year, but in the long term, he expects demand to stay high.

“Remember, five per cent of the province is private, 95 per cent belongs to the Crown,” said Nielson, who can rattle off numbers like a machine gun.

“There’s 1,800,000 titles in British Columbia. 1,350,000 titles are residential, which is condos [and] single family. You take the balance and take commercial and industrial off of that, you’re down to less than 200,000 properties which we call recreational. There’s not a big pot of recreational land out there.”

Beginning Saturday, The Vancouver Sun will publish a weekly guide to real estate opportunities outside the Lower Mainland. Each week you can read about recreational property trends and new developments across B.C. in the Out Of Town Properties section.

© The Vancouver Sun 2008