Many boomers have fond memories of idyllic summer vacations filled with s’mores by the fire, games of hide ’n’ seek and endless hours lying on the beach.
Today, those boomers are re-energizing the demand for recreational properties across much of the province. The RE/MAX Recreational Property Report 2013 says, “Some of that upward momentum is already evident in Western Canadian markets, the first to feel the effects of the downturn that began in 2009. Recreational property sales in seven of the 10 markets (70 per cent) examined in the Recreational Property Report are on par or ahead of year-ago levels.” (See price table at bottom.)
Recreational property is defined as a second home; that cabin in the woods, that rural retreat, the condo on a golf course, the cottage on the lake or the beach house. It can also encompass timeshare condos and hotel rooms, or even a piece of raw land where you park the camper.
After a dismal few years in the early 2000s, when the market for recreational property went flat, Kelly says the tides are shifting. There are many factors for this: easy credit, faith that real estate will keep its value and an economy that is doing fairly well.
“Everybody dreams of owning recreational property and lots of boomers are getting on the bandwagon and buying,” adds Kelly.
A study published by Royal LePage this year found that 28 per cent of British Columbians who were in the market for a recreational property planned to buy a condo in a recreational community.
For recreational buyers, there are amazing deals emerging; you just have to do your due diligence.
You may want to look at Harrison, where you can get from Vancouver to your piece of paradise in less than two hours. For instance, says Diane Jacobi, Realtor for Royal LePage Harrison, a two-bedroom waterfront condominium that sold a few years ago for $465,000 was recently sold for $359,000.
“We’ve had several sales over the last few months,” adds Jacobi. “People, from the Lower Mainland and Alberta are seeing the substantially lower prices and are buying.”
Meanwhile, on the Sunshine Coast the market is slowly rebounding. The region offers great beaches, magnificent views, an easy commute, less rain and attractive prices, so Albertans and British Columbians are seeing the value of buying a vacation home here, says Bill Binnie, owner/broker at Royal LePage.
“You can leave the North Shore and hop on a ferry and in 40 minutes be at your boat-access property off Secret Cove,” adds Binnie. “You can get tremendous value here. Prices are either stable or going down.”
Sechelt is showing some improvement as prices are 15 per cent lower than they were five years ago. Although Binnie admits sales have been slow in the past year, the recent provincial election seems to be buoying sales.
“The Sunshine Coast in particular, with its quaint communities with many amenities, from Gibsons to Sechelt to Edgemont and everywhere in between, is starting to sell,” he says.
The Gulf Islands have also seen their fair share of ups and downs, says Janet Moore of Royal LePage (Nanaimo Realty). Located in the Strait of Georgia, the Gulf Islands include Salt Spring, Pender, Mayne, Galiano, Saturna, Gabriola and dozens more.
“The Gulf Islands certainly have their challenges, one being the commute … often, people have to take two ferries to get to their vacation home,” she says. “Our other challenge is that many people went south of the border for recreational properties because they are 50 per cent less than here.”
The best deals right now are on Thetis Island and on Vancouver Island in Chemainus, Ladysmith and Yellow Point.
“A property on Thetis Island listed for more than half a million and sold for $356,000,” she adds. “A Ladysmith waterfront assessed for $425,000 sold for $75,000 less than its assessed value.”
In the Okanagan, Kelowna’s prices have declined slightly in the last year, says Mark Walker, sales representative at Royal LePage Kelowna.
“However, we are on an upswing from people who were hit by the 2008 recession,” adds Walker. “Resort-style condos or anything on the Westside (defined as 10 to 15 km. outside of Kelowna) are selling well.”
According to Walker, approximately eight large recreational resorts have been built over the last 10 years, translating into 12 to 15,000 resort-style condos—many on or within a block of the lake.
“We’ve seen an extreme growth in these vacation properties, with demand being driven by Alberta and Saskatchewan residents wanting to move up here once they retire,” says Walker. He adds that non-waterfront properties in Kelowna can run about $240,000 to $450,000, while standard waterfront sells for as much as $800,000 to $2 million.
A recently published report by Landcor Data Corporation on the market for raw recreational land in BC, states that “Of the 89,103 recreational titles identified by Landcor, 87,025 or almost 98 per cent are registered to Canadian addresses: B.C. 80,060; Alberta 5,678; Ontario 713; with 574 scattered in other provinces. The foreign contingent: USA 1,551; Germany 159; UK 103 with the other 265 titles worldwide with Oman, China and a bunch of others a mere one title apiece.”
“The value in recreational housing markets across the country is virtually unprecedented,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Softer prices, in combination with an overall brighter economic picture and growing consumer confidence levels, have served to bolster activity in this segment. A stronger U.S. economy has also contributed to the traction in the market for secondary homes in Western Canada, as higher values in sun destinations and—in some instances—challenging logistics prompt purchasers to once again consider Canadian options.”
The Landcor Report’s conclusion to people sitting on the fence, debating whether to spend their hard-earned money on recreational property, is: “Don’t wait and buy land, buy land and wait.”
What to consider before purchasing recreational property
(Courtesy Ozzie Jurock, real estate investment advisor, columnist and author)
- How will you be using it? Do you want to spend a month at a time, or do you want a place for quick weekend getaways?
- What are the amenities?
- What is the water situation?
- How much of the day will you have sun? ( If you have waterfront, west is best.)
- Is it a destination for more than one season?
- Is there a variety of recreational activities?
- How long does it take you to get there? Three ferries? Eight-hour drive? No car access? You will never go there again.
(It can take most of a day and three ferries to reach Gulf Islands such as Denman, Hornby or Galiano, Texada. Keats Island or Gambier in Howe Sound in less than an hour from Vancouver… but little car access. Islands like Salt Spring and Pender in the Gulf with frequent car-ferry service have always had better price appreciation. Sunshine Coast has easy access, lots of ferries, good values. Bowen has good access but it’s expensive—on the cusp of becoming one of the top recreational destinations anywhere near Vancouver.)
- If buying at a resort, understand:
- Hotel units and fractional ownership
- Common area costs
- If buying in a new development, check out the developer:
- What have they built before?
- Can you talk to someone who has bought from the same developer?
- How strong is the financing?