About 3,300 baby boomers now at or nearing retirement are cashing out of their homes in Metro Vancouver each year and moving to more affordable areas, according to an analysis from the sociology department at the University of British Columbia.
It is an outgoing tide expected to swell as Metro Vancouver’s population over age 65 soared by 24 per cent between 2011 and the 2016 census to hit 387,000 out of an overall population of 2.5 million.
While some seniors are leaving cash-heavy from home equity, the majority are seeking assurance of a long-term income stream to secure their retirement, said Scotty Grubb, an active senior himself and the developer behind Oliver Heights in the wine-country town of Oliver in the South Okanagan.
Grubb said the concept behind Oliver Heights is to deliver high-quality, compact retirement homes in a resort environment but to also provide owners with the option of rental income from built-in rental apartments.
All this for less than $400,000, or about 25 per cent of the cost of a small, older bungalow in East Vancouver or North Burnaby.
“An owner can take off to Mexico, Arizona or other destinations for months and still have money coming in,” Grubb explained.
The South Okanagan is already a prime destination for seniors and people of all ages, and Oliver is representative of the attraction. Known as the wine capital of Canada, the town of 15,000 has 40 wineries in the area, plus three golf courses. The refurbished Mount Baldy ski resort is a short drive away, and the town boasts a regional hospital. A Formula One racetrack is a quick drive from town, as are two lakes. Both the U.S. border and the Penticton airport are within a half-hour drive.
A likely lure for rain coast residents is that Oliver boasts the driest climate in Canada and is only a four-hour drive from Metro Vancouver.
Grubb, CEO of Oliver Heights Development Corp., said Oliver Heights is being built in phases, with the first phase already sold out. He officially launched Phase 2 during the World Outlook Conference in Vancouver in February. Oliver Heights, a benched community, will eventually have about 300 homes.
Grubb sat down with Western Investor to explain how the unique resort-and-rental income works at Oliver Heights, where 23 detached homes are planned overlooking vineyards and the southern Okanagan Valley in Phase 2.
The average price of the lots is $129,000 (with some Phase 1 lots as low as $120,000.) The 40-foot- wide-by-100-foot deep lots are sold as bare land strata. Strata fees are expected to be around $95 per month, and this includes snow removal and landscaping.
The lots are being sold with a 10 per cent down payment, with the balance paid within four months. Financing packages are available from local credit unions, Grubb noted.
The engineered houses average $256,000 and, with a $129,000 lot, the all-in price is approximately $386,000.
While many former homeowners from the Lower Mainland may be paying cash, financing is arranged with 20 per cent down payments. Estimated mortgage payments are in the range of $1,440 per month.
Grubb said they will have a show home on site by early spring, and will see construction begin on the Phase 1 lots that are sold. Lot purchasers can also design and construct using their own builder.
Oliver Heights houses can be purchased as private residences with room for guests and family visitors, but the rental option is intriguing. The houses with a suite option offer two residences with up and down suites and are priced a fraction more, starting at about $296,000. The suites are a two-bedroom, 1,200-square-foot upper unit and a lower suite that is a two-bedroom with 900 square feet.
The rental projections are that the lower suite would rent for $1,000 per month and the upper suite for $1,500 per month. An owner could see positive cash flow from the first year onwards, Grubb’s figures show. Finding tenants should not be a problem, since Oliver has a near-zero vacancy rate, according to Canada Mortgage and Housing Corp.