Boomers, Albertans drive white-hot demand for B.C. vacation property
From Vancouver Island to the Kootenays, unprecedented demand for recreational property has led to startling price increases and some innovative retirement concepts.
“British Columbia is at the leading edge of the baby boomer bubble,” said developer David Sorenson. “We have buyers coming from across Canada and around the world.” And they are coming well-heeled, indicative of the most affluent retiree generation in history.
This year, Sorenson Fine Homes began marketing the master-planned strata-titled King Edward Bay, a 48-lot upscale recreational project on Bowen Island, just off the coast of West Vancouver, where waterfront lots start at $1.2 million and in-the-forest lots are in the $400,000-$500,000 range. “We sold 21 lots since January, “Sorenson said. He explained many of the buyers are pre-retirees, planning on securing a retirement home or investment before they hit 65.
“At least two of our buyers are speculators, I am proud to say,” Sorenson said. The older buyers don’t want large homes, said Sorenson, whose company is the exclusive builder,” but they do demand luxury.”
Sorenson has seen similar action with its waterview lot development, Patricia Bay in North Saanich on Vancouver Island, with the exception that many of the buyers are from Alberta. At Patricia Bay, six of 15 lots have sold with prices in the $400,000 range.
Ross McKeever, a real estate broker with Colliers International, Victoria, agrees that “the boomers are driving the market. They are all looking for these recreational activities.”
McGeever noted it is local developers who are cashing in on the boomer boom. The Limona Group, for instance quickly sold out a 75-lot waterfront development on Cowichan Lake north of Victoria. At Mount Washington ski resort, a first phase of building lots sold out at $90,000, and the second phase, now coming on stream, will start at $115,000.
In the Comox Valley, which now offers direct WestJet flights to both Calgary and Edmonton, lot values have increased 23 per cent in the past year and condominium prices have shot up 40 per cent.
If you think the Island properties are in demand, take a look at the Okanagan. Recreational real estate in the Okanagan is white hot and developers are responding with increasingly upscale alternatives to the traditional “weekend cottage.”
According to data from Landcor Data Corporation, average sale prices across the Okanagan rose 13.9 per cent between 2004 and 2005, 22.5 per cent from 2005 to 2006, and have already jumped 11.1 per cent in just the first three months of 2007.
Most industry insiders predict this upward pressure on the bottom line will continue. “I don’t believe prices are anywhere near topping out yet,” says Randy Shier, principal of Kelowna-based Mission Group. “As the eyes of the world continue to focus here, demand – and prices – is unlikely to do anything but increase.” He cites the Mission Group’s recently launched Sheerwater project, a 70- acre subdivision on Lake Okanagan, where two- to five-acre lots are commanding prices as high as $2 million.
But when an offering is right, investors are clearly far from shy about handing over the dough. At Vernon's Silver Star, all 49 building lots in the new Alpine Meadows neighbourhood were snapped up within three hours of coming on the market at prices ranging from $220,000 to $440,000.
Feathertop, Big White’s newest ski-in/skiout real estate development, near Kelowna, sold out its entire first phase of 17 chalet homesites, with a combined value of more than $5 million, minutes after they went on sale. And last fall, Watermark Beach Resort in Osoyoos had buyers for 70 per cent of the 153 suites by end of opening day, thus generating some $75 million of revenue.
Savvy developers are now also tapping into another aspect of the Okanagan – B.C.’s burgeoning, world-class wine industry. The Osoyoos Indian Band has introduced the Spirit Ridge Vineyard Resort and Spa as an extension of their award-winning Nk’Mip Winery. The band incorporated all the amenities the Okanagan is famous for – golf, outdoor sports, spa, fine dining and a cultural centre. Vancouver-based development giant Concord Pacific is taking note.
Concord's Greta Ranch master planned community, set amid the Greta Ranch Vineyard (part of the well established Cedar Creek Winery) gives buyers an opportunity of vacationing inside a working winery.
Matt Meehan , Concord's vice president of planning, said, “This is a completely new type of product, one that’s in its infancy.” He predicts the appeal of combining a lock-and-go lifestyle with the allure of a waterfront vineyard will make this a solid investment option.
After bringing a series of successful projects to market, including the $65 million Sundance Resort at Big W h i t e , J i m H a m m o n d , director of new development at Legend Resorts, is about to take this innovative new style of “vintage” offering one step further. Veranda Beach is a 280-acre master planned resort village located on the shores of Lake Osoyoos and boasting a full mile and a quarter of pristine, sandy beach. A feasibility study is underway for the addition of an 18- hole golf course, and boutique winery.
What makes this development unique is its location directly opposite Osoyoos in Oroville, Washington, where property values remain significantly lower.
“You will be able purchase a beachfront villa for just over US$900,000 at Veranda Beach,” said Ian MacLeod, CEO of LandLaunch, the company marketing the project. “The same property in Kelowna would easily cost $2 million – and you’d probably never find one on a beach like this. Jim had the vision to look across the lake and say: That is unique and beautiful and I can do something with that. The value proposition it represents is incredible.”
Still high on the radar for many is the combination of recreational property and golf. And the multi-phase, multi-award-winning Predator Ridge in Vernon remains clearly established as a destination of choice in this category.
“There is a consistent demand from places like Alberta, Europe, England and Australia,” says Lisa Corcoran, director of marketing, adding that the recently announced $8 million runway extension to the Kelowna airport, with direct flights to Sydney and Frankfurt, will make this even more popular with the international jet set.
Only a sixth of the way through development toward a final count of approximately 1,800 residences of varying types, Predator Ridge saw the first phase of Osprey Coach Homes sell out in an hour, with prices starting at more than half a million dollars.
“But it’s important to remember that here in B.C. and in the Okanagan in particular, we are still considered a very affordable place to purchase when you compare it to the world scale,” Corcoran stresses.
Susan M. Boyce/Frank O'Brien , Western Investor - June 4, 2007