UPDATE: Powell River sees highest home price hike in B.C.

Powell River’s paper mill has been shut down since April but the coastal town posted B.C.'s highest home price increase in July with a 30 per cent hike from a year earlier.

By
Western Investor
August 14, 2020





Powell River aerial
— Aerial view of Powell River. | Powell River Peak

Powell River’s paper mill and largest private-sector employer temporarily shut down in April but the town posted a 30 per cent year-over-year increase in home prices in July – the highest in British Columbia – and sales in the coastal community soared 31 per cent from the same month a year earlier.

Powell River is a community of 20,700 about 100 km. northwest of Vancouver, accessible by two BC Ferries that link the Sunshine Coast community with Metro Vancouver.

Once a thriving mill town, Powell River is now best known as a tourism and retirement destination. Twenty-seven per cent of residences are over the age of 65, compared to a provincial average of 18 per cent.

The town’s summer sales surge is reflective of action across the province, noted the BC Real Estate Association, as July average house prices increased 10 per cent from a year earlier, led by areas outside of Greater Vancouver.

The total dollar volume of July transactions soared 72 per cent in Powell River –  to $22.5 million – an increase second only to Victoria.

Catalyst Paper Corp. shut down its Powell River operation in April and, during a July 14 meeting with town officials, the company said it has no timeline of when it will start-up. Catalyst is owned by Richmond-based Paper Excellence Canada, which has also closed or curtailed production at its mills in Crofton and MacKenzie, B.C. since the pandemic began.

The Powell River mill produces newsprint and uncoated mechanical specialty papers on two paper machines and had employed 360 people.

Neil Frost, president of the Powell River-Sunshine Coast Real Estate Board, confirmed July home buyers were very active.

“We’re all run off our feet,” said Frost. “There’s a lot of out-of-town purchasers.”

Tod English, president of Powell River real estate developer English Enterprises, said a lack of housing is among the reasons home prices are rising. "We have a near-zero vacancy rate here," he noted. English added that most believe the Catalyst has "curtailed operations" and that paper the mill will reopen shortly. 

People are wanting to explore housing opportunities outside of the Lower Mainland, or they have been thinking about Powell River and have decided now is the time, according to Frost.

Based on BCREA data, the migration of home buyers from Greater Vancouver appears to have accelerated since the global pandemic was declared in March. As of June, 70 per cent of home sales took place outside of Metro Vancouver.

Powell River June real estate board data showed that out-of-town buyers – 28 - accounted for nearly three times the number of home sales as local buyers, at.11 transactions.

A number of higher-priced properties, such as luxury waterfront, sold in July which accounts for the province-leading price increase in Powell River, according to Frost, The BCRE pegs the average Powell River home price at $450,800, compared to $1.04 million in Greater Vancouver.

Frost said, that, when luxury homes are omitted, the average price of a detached single-family house in Powell River is actually around $425,000.

- With files from Powell River Peak


Frank O'Brien is the editor of Western Canada's biggest commercial real estate newspaper, Western Investor, as well as a contributing editor at West Coast Condominium, real estate contributor to Business in Vancouver and a regular media commentator on real estate investment.
Copyright © Western Investor

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