Urbanite demand drives up waterfront cottage prices
July 27, 2017 | Stories, In the News
That shack by the water will now cost north of $600,000 anywhere within a four-hour drive or ferry ride from Metro Vancouver
The average price of a condominium apartment in Metro Vancouver is now $600,000 and, due to equally high demand, that is also the typical price being paid for a vacation cottage anywhere within striking distance of the city.
“Low inventory levels and the return of consumer confidence are driving prices up in recreational markets across the province,” said Jim Morris, manager, Western Canada, Royal LePage.
The average price of a recreational property in British Columbia is now $595,077, according to the Royal LePage Canadian Recreational Housing Report, but waterfront cottages at prime locations – such as on Okanagan Lake or the Gulf Islands – can easily cost twice to four times that.
Cultus Lake, a short drive from Vancouver, is a good example.
“A lot more people are moving in here full time, 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.”
“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 and we’ve picked up more property to keep that rolling.”
That sentiment is borne out by a survey released with the annual Re/Max Recreational Property Report this spring. The poll of agents dealing in recreational property in B.C. found that younger buyers are leading the demand for recreational land.
Seventy-three per cent of agents surveyed reported that young families with children were the primary buyers of recreational properties.
“A notable finding is that 21 per cent of Canadian homeowners would downsize their main residence in order to purchase a cottage, cabin or ski chalet,” said Elton Ash, regional executive vice-president at Re/Max of Western Canada.
Areas close to Vancouver and Victoria are seeing the highest demand and the fastest-rising prices.
“We have seen homeowners selling in Vancouver and buying recreational property in areas like Denman Island, causing a significant decrease in available supply this year,” said Sylvie Schroeder, sales representative, Royal LePage, in the Comox Valley. “Younger families in particular are buying up local acreages in order to practise sustainable farming, which is a fast-growing trend in our area.”
“Recreational sales activity has increased significantly on the Gulf Islands,” said Janet Moore, real estate sales agent, Royal LePage Nanaimo Realty. “We have finally seen the return of buyers to smaller regions within the Gulf Islands, driven by both interest in recreational activities and retirement.”
On the Sunshine Coast just north of West Vancouver, the sales-to-listing ratio for houses hit 73 per cent in June, the highest of all markets served by the Real Estate Board of Greater Vancouver. The Coast’s benchmark house price, at $553,000, is up 20 per cent from a year ago. An oceanfront cottage on the Sunshine Coast now sells for an average of $900,000.