ISLAND
& RESORT PROPERTIES
Survey shows
shortage of Recreation Property
Lack of supply and soaring demand, partly driven by the threat of
higher interest rates, is putting recreational property beyond the reach
of the average British Columbian.
Prices for waterfront property start at $350,000 in the Comox Valley,
$450,000 in Tofino and $700,000 on Saltspring Island, according to a
survey by Royal LePage. That's up from $140,000, $240,000 and $500,000,
respectively, in just 18 months.
But even the rich could be out of luck if they want waterfront because
there is so little available, realtors say.
High starting prices and limited sales activity helps to explain why
prices for B.C. waterfront across the board show only an eight-per-cent
increase over the year, according to Royal LePage, compared to 21 per cent
in Quebec and 17 per cent in Ontario and 17 per cent in Manitoba.
Prices for recreational chalets and condos are up just 0.5 per cent in
B.C., compared to 18 per cent in Quebec, 12 per cent in Ontario and 11 per
cent in Alberta.
Realtors say the appeal of the B.C. climate and lifestyle is blurring
the line between recreational use and year-round living.
Increasingly out-of-province residents are buying for seasonal use
today with a view to making the property their retirement home, says
Re/Max realtor Dave Procter in Comox.
In Whistler, where prices plateaued about 18 months ago after
skyrocketing for a decade, wealthy buyers are attracted from around the
world for full-time residences as well as retirement or winter or summer
recreational uses, Re-Max realtor Michael d'Artois says.
"Whistler used to be connected with trends in the Vancouver
real-estate market but we are somewhat disconnected now," d'Artois
says.
"We have buyers coming from many different places because Whistler
is on the radar screen for people looking to retire and to improve their
quality of life. We are not adding supply, and demand continues."
In another survey, Re-Max says it is not just Canadians flooding into
the Canadian cottage market "like never before" but also
Europeans and Americans.
On Saltspring, prices are up 12-16 per cent since the start of 2003,
says Royal LePage realtor Miles Wilson, with many buyers from California.
He says it is still possible to buy "high-bank" waterfront
property, where it is difficult or impossible to access the water, for
$400,000 to $500,000.
Prices are much higher for ocean-front property on Saltspring. If you
want to be able to splash into the saltchuck from your own dock, Wilson
has 12 listings under $1 million and 13 for $1-million plus.
"We're getting buyers from all over and there is more demand than
supply," he says.
In the Okanagan, it is difficult to find any waterfront property within
two hours of Kelowna, Royal LePage realtor Wade Webb says.
"People are hanging on to it, or handing it down, or neighbours,
friends or family will pick it up," Webb says.
On Okanagan Lake, prices are up 30-50 per cent, Webb says.
"Vancouver is fuelling a lot of the activity with people selling
down there and buying for lifestyle and semi-retirement here in Kelowna."
In the Fraser Valley, Re-Max realtor Alex MacDonald says it is rare for
any property on Harrison Lake to become available. At Cultus Lake,
leasehold cabins on 25-foot lots start at $250,000, while freehold
executive-style houses can fetch more than $1 million.
Prices for waterfront property have doubled in the Comox Valley in one
year, helped by regular Westjet flights into the new international airport
at CFB Comox.
"You've got baby boomers coming out of the prairie provinces by
the planeload looking at our climate, what we have to offer in a ski hill,
fishing, clean air and lots of good water," Re-Max's Dave Procter
says.
"We have a lot of oil money coming in here with people in their
late '40s and early '50s buying for the future because it is so easy to
get here."
Recreational property on Mount Washington is also becoming scarce with
surplus inventory eaten up over the past 18 months, Procter says.
The Re-Max survey says the threat of higher interest rates has shifted
recreational property purchasers into overdrive in major Canadian centres.
"The level of demand we are experiencing is unprecedented,"
says Kelowna-based Elton Ash, regional director of Re-Max Western Canada.
"Finding the ideal property may prove to be a challenge in 2004.
Waterfront listings, in particular, have become a scarce yet highly
sought-after commodity."
The survey says baby boomers are leading the charge for recreational
properties. - by Michael
Kane Vancouver
Sun 20 May 2004
MALCOLM PARRY SOCIAL
SCENE
Michael Budman, the 200-store Roots
clothing-chain founder and head, spent Tuesday morning with 1998
snowboarding gold-medallist Ross Rebagliati and other Olympic athletes at
Robson and Burrard Street. That's the locale he's called Roots'
"best-dollar store on the best shopping street in Canada," and
where he and store manager Rich Patterson showed the apparel Canadian,
U.S., British and Barbadian athletes will wear at the Athens Olympics this
summer.
Rather than take indoor nourishment at his
nearby lodgings, the Sutton Place hotel, Budman opted for Bud Kanke's Joe
Fortes, a block's stroll away at Thurlow-off-Robson.
Catching rays on a wide-open roof deck, Budman
shared a dozen Stellar Bay, Gorge Inlet and Kusshi oysters, and tucked
into grilled sockeye salmon, ahi tuna and arctic char with a pint of
Granville Island pale ale on the side.
"How can you beat it here?" he asked,
waving to the empty plates, blue sky and overstuffed flower baskets. This
from a chap who shares a 10-lot estate in Toronto's exclusive Forest Hill
district with architect-wife Diane Bald. Not to mention a
5,000-square-foot loft downtown and a private lodge in Algonquin Park
where the likes of Michael Douglas, Lorne Michaels, Dan Ackroyd and
perennial pal Jason Priestley come a'visiting.
Budman said he's down to a choice of two
3,000-square-foot spaces to open a Pacific Centre Roots in October. By
then, the Whistler store will have doubled to 3,000-square-feet, and he'll
have a deal for a 13,000-square-foot city store to match Toronto's
flagship operation.
No word on the locale or his firm's dollar
volume, but Budman said: "When you're private, you take a longer-term
view." Reflecting Google founders Sergey Brin and Larry Page's recent
admonishment to investors, he added: "When you're public, you have to
answer to your shareholders. When you're private, you have to answer to
your customers."
That means hotel customers, too, since Budman
says he'll open a 100-or-so-room hotel here before the 2010 Olympics, in
which he expects Roots to play a large part. That should provide a gig for
Bald, who joined Parisian architect Andre Putman to start the
boutique-hotel movement with Manhattan's 1984 Morgan's.
Not that Budman will stay at the hotel. A
Shaughnessy mansion close to that owned by friends Goldie Hawn and Kurt
Russell is more his speed.
"I'm going to buy a house here," he
cell-phoned his spouse from Joe Fortes' roof.
"Fine," she replied.
-by Malcolm
Parry Vancouver Sun
20 May 2004
Average cottage price hits $200,000
Cottaging increasingly becomes pastime for elite: Can't meet demand
High atop the red clay cliffs of Prince Edward Island's north shore,
George Campbell is fighting a losing battle against his summertime pests.
Like blackflies in flip-flops, cottagers are an annual annoyance, he
says. So Mr. Campbell, the outgoing chairman of the Lucy Maud Montgomery
Land Trust, has been gathering donations to buy up waterfront land and
ensure it remains dotted with cows and the odd farmhouse, just as Anne of
Green Gables knew it.
But in P.E.I. and across Canada, Baby Boomer cottagers have other
plans, and the money to make them happen.
Demand for cottages and recreational condos outstrips supply seven to
two, a ratio clearly reflected in skyrocketing prices, according to a new
analysis by real estate company Royal LePage.
From Ucluelet on the West Coast, through Canmore and Lake of the Woods,
to Haliburton, the Laurentians and Shediac Bay, prices for waterfront
cottages have risen by 10% over last year to a national average of
$200,000. Asking prices over $500,000, which were a noteworthy
extravagance in the 1990s, are now common across Canada. In some areas,
prices have doubled since two years ago, so now $100,000 barely buys you a
boathouse. On British Columbia's Salt Spring Island, for example, five
acre plots without so much as an outhouse have risen in price by 40% over
two years to $250,000 today.
Although there are $50,000 shorefront bargains to be had in
Newfoundland, and many popular cottage countries have properties for sale
in the low $100,000s, the conclusion is clear: Cottaging is an
increasingly elite pastime.
"I think we're at the beginning of a fundamental change in the way
people view recreational property," said Phil Soper, president and
CEO of Royal LePage.
High prices are changing both the people who buy cottages and the way
they use them, he said. If this trend continues, he believes the
quintessential Canadian cottage will no longer be a rustic getaway with
hand-me-down furniture, a mice problem, some battered board games and a
collection of romance and spy novels.
Instead, he thinks the cottage is becoming a comfortable extension of
the city home, complete with all the technology needed to fulfill one's
professional duties dockside. Where once a floating dock was a selling
point for a cottage, today it is cellphone reception.
"Summertimes in Canada are going to be a very different place in
the future than they are today, where people truly do look at four-day
work weeks," Mr. Soper said. "People who have never considered
becoming mobile workers will become mobile workers."
Peter Bardon, a veteran real estate agent on Salt Spring Island, agrees
that work requirements -- especially Internet access -- are key points of
negotiation.
"Twenty years ago, lots of people wanted Coleman lamps and the
like, and they didn't want phones. Nowadays, it seems that the greater
percentage of them want to be able to use their cellphone and their
laptop," he said.
This trend is leaving its mark on the
architecture of cottage country, too, said Al Zikovitz, publisher of
Cottage Life magazine.
"If you're going to buy a piece of property
that's $250,000, you're not going to put a $50,000 building on it,"
he said.
And with such a deep investment, there is a
stronger temptation to retire at the cottage, rather than hand it down to
one's children and grandchildren. This, in turn, marks a demographic shift
for cottage country's population.
"These are people who want easy access
right to the front door of their cottage, they want hospitals nearby, they
want paved roads, they want garbage pick-up ... and that is going to
change cottaging," Mr. Zikovitz said.
Another major real estate organization, RE/MAX,
said it is not just Canadians flooding into the Canadian cottage market
"like never before" but also Americans and Europeans.
"Canadian residential real estate
represents great value to American and European purchasers," it said.
"Given current property values in prime international recreational
destinations such as Cape Cod, Nantucket, the Hamptons, Aspen, and Vail,
many of these Canadian markets are undervalued."
"The level of demand we are experiencing is
unprecedented," said RE/MAX vice-president Elton Ash.
The current low level of interest rates combined
with the threat of rising rates has pushed the search for cottage
properties into overdrive, RE/MAX said in its 2004 recreational property
report.
The greatest price increases have been for
"quality" waterfront properties, it said, noting that only
one-third of markets surveyed have waterfront properties available for
$200,000 or less and only one -- Newfoundland East -- for under $100,000.
"By far the most expensive waterfront
markets were found in Salt Spring Island, Vernon, Muskoka, Penticton and
the Sunshine Coast -- where starting prices exceeded $500,000 -- and
Wasaga Beach [Ont.]," it said.
"The waterfront is becoming an exclusive
retreat for affluent purchasers," said Michael Polzler, another
RE/MAX vice-president. "Purchasers of more modest means will have to
compromise to realize their goal of ownership."
As for P.E.I. and the campaign to ban the north
shore cottages, Mr. Soper of Royal LePage calls it "a classic case
study in changing land use." Rising demand and the 13% increase in
waterfront prices are a boon for farmers looking to take advantage of
their land's value, he said.
But Mr. Campbell is adamant that the proper
industry for Charlottetown to promote is tourism, not cottaging. "Why
would people keep coming to Prince Edward Island to see cottages?" he
said. - by Joseph Brean
National Post
18 May 2004
Real Estate Fund Manager has reviewed the
following investments:
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