Housing migrants driving recreational property price inflation
By Peter Mitham June 27, 2017, 6 a.m.
Metro Vancouver’s affordability crisis is hitting the secondary home market, too, according to Royal LePage’s annual recreational property report.
“Many prospective buyers have decided to forgo upsizing within the highly competitive Vancouver marketplace, electing to instead push outwards in search of a recreational property,” Jim Morris, manager, Western Canada, for Royal LePage, said in remarks accompanying the report.
Often, recreational properties have the amenities that the current generation of first-time homebuyers want, at prices they can afford.
“A lot more people are moving in here full time as well, seeing the value for money. It goes a lot further out this way,” said Steven Van Geel, a principal with Frosst Creek Developments Ltd., which has undertaken two developments at Cultus Lake in recent years.
The result has been soaring prices and a dramatic decline in availability.
A year ago there were 25 units listed for sale; today there are just three.
So far as new product goes, Frosst Creek has just one unit left at the 230-unit Cottages at Cultus Lake, and nine to sell at its more recent project, the 70-unit Creekside Mills.
“A lot of the resales that were on the market got scooped up last year in that crazy market, and now there’s not enough supply,” Van Geel said. “Last year a mid-size cottage was around $420,000; now it’s $550,000, almost $600,000.”
Alture Properties Ltd. has seen a similar dynamic, achieving prices as high as $1.7 million on Cultus Lake lots that start at $900,000.
“We don’t feel there’s any pushback,” Stephen Duke, executive vice-president of Alture, said. “It’s on fire.”
Alture has bought parcels on either side of the Harrison River to meet the demand, Duke said.
“If you’re selling a house in Burnaby or North Vancouver, you can burn the mortgage and get two places by coming out to the valley,” he said. “We’re seeing really good absorption at Harrison Highlands and we’ve picked up more property to keep that rolling.”
The new properties should offer homes at prices below $500,000 apiece.
Pointing fingers at newcomers is a favourite pastime for Metro Vancouver residents who feel soaring house prices have left them behind, but what about the people in communities taking in the region’s priced-out housing migrants?
Regions around the province are finding themselves land-poor as people move in, and Mark Walker, a sales associate with Royal LePage Kelowna, said that’s boosted prices by as much as 25% – 10% this spring alone.
Often, the folks who have an edge are those who’ve cashed out of larger centres.
“The paradigm of those coming from Vancouver, especially if they’re trying to live in Kelowna, is a lot higher than someone coming from Edmonton,” he said. “Occasionally you’re seeing someone really pay the piper to get a house, and that really changes things. It’s really inflating property here.”
Speculation by investors is also a factor, Walker added – all of which should sound familiar to those left behind in Vancouver.
And the investors said one to another, “Let us now go even unto Bethlehem and see this thing which has come to market.”
Or at least that’s the sense from the Goodman team at HQ Real Estate Services Ltd., where Cynthia Jagger is taking the lead on the Bethlehem Lutheran Church listing alongside David and Mark Goodman.
Situated a block from Main and East 16th opposite Tea Swamp Park, the church property hit the market in February and attracted interest from 100 registered buyers.
Whittling down the list of prospective buyers to 18, a short list has been developed that should soon result in a deal for the site.
Described as a “multi-family redevelopment site,” the property is listed as a redevelopment opportunity, either with residential units exclusively or a mix of residential units and 7,000 square feet on two levels for Bethlehem’s use.