Housing affordably continues to dominate real estate conversation as a whole, spilling over into the secondary home market. This week’s top stories take another look at the recreational home market, which has caused Vancouverites to migrate towards smaller resort town properties in favour of cheaper stock – but recreational homes aren’t as cheap or plentiful as they once were.
We also take a look at a unique development in Squamish incorporating child care facilities, editor Frank O’Brien’s editorial on creating a new major city centre away from Vancouver’s housing bubble and he bittersweet contrasts in Regina’s commercial market.
Here is Western Investor’s pick of most talked-about commercial real estate articles published this week.
Housing migrants driving recreational property price inflation – Business in Vancouver
A new report from Royal LePage on the recreational market reveals that although many Vancouverites are looking outside of city limits for more affordable housing stock, the secondary home market on the fringes of the city is heating up, too. BIV’s Peter Mitham reports.
Often, recreational properties have the amenities that the current generation of first-time homebuyers want, at prices they can afford.
“A lot more people are moving in here full time as well, 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.”
Time to find a new Vancouver elsewhere in B.C. – Western Investor
We know that the recreational market is heating up – but comparatively, housing outside of Greater Vancouver is still cheaper. Our editor Frank O’Brien suggests that maybe perspective homeowners should be looking to other areas of the province as B.C.’s “new Vancouver,” where housing is often times more affordable and lifestyle is comparable. Migrating to a new area maybe a solution to our housing crisis.
Government attempts to cool the market have failed. A crackdown on assignment sales came in a year ago. The 15 per cent foreign-buyer tax followed in August. Mortgage restrictions were brought in, forcing buyers to qualify at higher rates. There are now tough new rules for short-term rentals and very high fines for vacant homes in Vancouver.
But the average house price is still increasing by $45,000 a month, the vacancy rate remains near zero, rents are soaring and housing sales are roaring back to record levels.
Skyrocketing land prices will make the fewer new homes even more expensive, which in turn makes it ever harder to recruit and retain employees.
We must reluctantly surrender Vancouver to the speculators, the elites, and the city’s entrenched and indulged underclass.
It is time to create another Vancouver, somewhere that middle-class families, millennials and the growing legion of seniors can find a comfortable lifestyle and a home they can afford.
If Metro Vancouver is knocked out of the equation, the average home price in British Columbia now is around $400,000. Even on the coast, the average is not much more than $500,000 and many condos are half that price.
These prices easily qualify for the B.C. government’s first-time buyer incentive that matches a buyer’s down payment with a no-interest, no-payment loan for five years. They are also within reach of average wage earners and most retirees. Plus there is land, and local governments that are eager to attract business and families.
Victoria homes are already ascending to unaffordable levels, so we must look at smaller centres to turn into the next Vancouver.
Possible options include Kamloops - about four hours from Vancouver with excellent infrastructure, a large land inventory and an average house price of $360,000; the land-rich Sunshine Coast – 35 minutes by ferry from the Lower Mainland but a fixed link is being studied – where the typical house price is $538,000; and Nanaimo and District, a potential Silicon Valley north with a nascent high-tech industry, oceanfront, a land mass of 2,034 square kilometres, – nearly equal to Metro Vancouver – and detached houses for less than $500,000.
Vancouver developer proposes housing/commercial property in Squamish’s ‘teardrop’– Squamish Chief
Developers have been eyeing Squamish and a new proposed mixed-use development may be one the most unique in the province. The Squamish Chief reports.
LT Wave Holdings’ proposed housing development at the “teardrop” property at the gateway to Squamish will include a large childcare centre.
Details about the Vancouver developer’s proposal for the odd-shaped narrow property at 38310 Buckley Ave. were revealed at an open house at Howe Sound Secondary School.
The four to six-storey proposal includes 104, one, two and three-bedroom apartments, making up roughly 86,000 square feet of residential space. Commercial units will make up about 18,000 square feet of the planned complex.
“We hope to create a vibrant downtown, a new gateway,” said the project's architect Cheryl Fu, at the open house. “This is the right development for the site.”
The retailers will be service-oriented and mix well with the schools in the area, Fu said, adding a café is imagined for the ground floor retail space.
“If you live upstairs, you can go downstairs and drop your child to the elementary school, as well as your other child to afterschool care,” she said.
A 6,000 square foot Bee Haven Childcare centre is planned for the northwest portion of the property. So far the idea is to have at least 24 infant and toddler spaces, 24 spaces for three to five-year-olds and 30 school-aged spaces, according to Louise Warner, of Bee Haven, which currently operates a centre in North Vancouver and has committed to set up on the site in Squamish, should the proposal go ahead.
Regina housing market "problematic" amidst building permit boom – Western Investor
Regina’s real estate market is defined by contradictions – The CMHC says the housing market is problematic, while investors remain confident and bullish on purchasing real estate. So what’s really happening?
As always, it appears Saskatchewan’s capital will reflect the vagaries of the provincial economy, which has a weaker resource industry but a stronger agriculture component.
With a relatively small commercial real estate sector, it is difficult for the big analyst houses to get a clear bead on the direction of Regina’s market. A single large apartment building can skew the housing starts and building permit numbers; a mid-size new shopping mall, office building or warehouse project can change retail, office or industrial vacancy rates.
So we have to look at the big picture. And it looks pretty good, according to Economic Development Regina (ECR), which recently studied job and population growth in the city.
The ECR reports that Regina’s economy continues to expand with nearly all indicators posting advances over the previous year.
Total employment in the Greater Regina Area was up 2.1 per cent in January to April 2017 over the same period in 2016.
The city’s year-to-date unemployment rate remains relatively low at 5.3 per cent.
The ECR also found that Regina’s population is increasing on the strength of international and intraprovincial migration, always a good sign, and is forecasting 2.6 per cent population growth this year.
The ECR, in step with the Conference Board of Canada, is also forecasting Regina’s economy to post 1.8 per cent real GDP gains in 2017, up from 1.3 per cent in 2016.
Stability. Security. Growth. For today’s commercial real estate investors, that could prove a winning combination in a volatile year.