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BC recreational property in ‘buyers market’

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Good news if you’re looking for recreational property in BC, you’ll find less competition as demand has dropped off and recreational property in areas like the south Okanagan has moved into ‘clear buyer territory’ according to RE/Max:

“The demand for waterfront recreational properties remains strong, but prices have stabilized,” Re/Max regional executive vice-president Elton Ash said in an interview. “That’s good news for consumers because there are fewer multiple offers driving prices higher.”

As well, Ash said, the availability of bargain real estate properties in the U.S. has clearly reduced the number of buyers looking at Canadian recreational properties.

“We see U.S. owners of Canadian properties putting them up for sale now so they can take their profits and reinvest them in the U.S sun belt,” Ash said.

…

While the price of a three-bedroom winterized home on ocean frontage on Saltspring Island starts at about $1.3 million, there are more affordable properties for sale throughout B.C.

The report said the South Okanagan market has moved into “clear buyer territory” for the first time in five years, with rising inventories, falling sales and price corrections underway.

The price of a two-bedroom condo on the water near Penticton now starts at about $400,000, with some developers paying the GST and providing complete appliance packages.

The report noted the North Okanagan recreational property market has also reached a plateau, but affordability remains an issue with a typical three-bedroom winterized home on a 66-foot Okanagan Lake lot starting at $1.5 million.

Does less competition and low interest rates make this the perfect buying opportunity or are ‘price corrections’ due to take a further chunk out of the recreational real estate market?

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admin

Richard – thanks for the link, I've added it to the free-for-all post. That article was like reading a release written by somebody arguing with themselves. They say a sharp US-style housing market correction caused by mortgage innovation is unlikely in Canada and then issue a warning about mortgage innovation in Canada and the growing number of owners with little or no equity. …And then theres the mortgage backed securities issue you pointed out: Thanks to a still-solid Canadian housing market, mortgage debt has continued to grow at about a 13 per cent pace but the banks are increasingly getting it off their balance sheets by securitizing it through the National Housing Act's mortgage-backed securities program (NHA MBS). Administered by Canadian Mortgage and Housing Corp., the program buys the mortgages from the banks. The government then finances the purchases by… Read more »

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admin

If banks forecast price declines they could be accused of causing them.

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Anonymous

"-12 will be turned into tiny text now"

come on bulls ever dare to enter in bears blog you will be rewarded……..

😉 -12. 😉 have you ever seen thums up2 in tiny text? he will get trapped in the bearish net.-former thums up2.

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patriotz

Bank analysts never call price declines.At best, they will predict further price declines once a bust is already under way.

rents are 2-3x the cost of ownership,

Ack, of course I meant "the cost of ownership is 2-3x rents".

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admin

I'm tweaking the comment moderation system, so ratings have been reset to zero. Comments rated below -10 will be turned into tiny text now, I'm still tweaking this, but I believe its working. Next step will be to highlight comments that are highly rated.

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chip

These bank analysts are truly ridiculous. Did any of them call the spike in inventory for Vancouver, the price declines in Alberta?

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patriotz

Not "now", it has been doing it for years.

"A sharp housing market correction, similar to that in the United States (ie: driven by subprime-mortgage innovation) is unlikely in Canada," the bank said.

Sigh. If prices are 8x incomes and rents are 2-3x the cost of ownership, that's the cause of the correction in itself, not the fine points of the mortgages.

As as for properties in the Interior, once again, pricing will be determined by fundamentals. But what makes these Interior towns so shaky is that they have no economy other than RE and tourism. Take away the RE bubble, and you have an employment bust and falling incomes and rents. That's the extra hit to RE valuations.

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richard

so does this mean the chmc is now buying mortgage backed assets? that just sucks.

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Anonymous

L8Bloomer, Merritt is certainly nice, in fact it is closest place to Vancouver with decent weather. But there are much more reasonably priced properties than Ranchlands. Look for a 10 acre lot not in ALR for around $200k- you can still find some of those. Not only it's half the price of what you pay at Ranchlands, but you actually get 10 times more land that you can call your own. It is better to get those now actually because the selection is limited (you might want to monitor the market for the next 6 months to see if the right property comes up) and even if they go down in price slightly you likely won't be able to find a clean lot you like a few years from now as most nice lots get built over. If you buy… Read more »

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Anonymous

"What goes up comes back down"

Last week i went to park my car in a parking lot on robson and denman i was surprised to see that Safeway is making new store on the lot,by reading the comment above i can stand by there with my engine runing unless the store return back to parking lot.Drachen?

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Drachen

betamax "Vancouver prices will correct also, but still not as badly as these podunk BC towns. In Vancouver, we actually have some decently paid jobs and industries which are unrelated to RE and construction…" Well then our correction would be completely contrary to everywhere else ever. What goes up comes back down. If a house in the Okanagan went from 100k to 300k it will return to 100k (adjusted). Likewise if Vancouver houses went from 250k to a million it will return to 250k (adjusted). Vancouver came up more ergo it will fall more. I have no idea why people who are on the bear side still don't seem to get this. Things will correct to reflect market fundamentals. "some decently paid jobs" is reflected in the pre-bubble market, it won't soften the fall. In fact I would argue that… Read more »

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-A-

>>>>>>>>>>>>>>>>>>>>>> <<<<<<<<<<<<<<<<<<<<<<<<<

Mortgage rates edged up 85 points today. Too bad, I had hoped rates wouldn’t move up yet, not until mortgage debt and inventory of unsold homes climbed even higher.

Oh well, I guess we will have to settle for the slow agonizing death by a thousand cuts to the housing market rather than a big fire works display.

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L8Bloomer

Mike – most of what we saw were bare land lots in developments. You buy, you build. Lots of pretty new houses going up in the Nicola Lake Estates development (1 acre lots on the lake for about $350k). But they're still not 100% sold. With Ranchlands people are buying lots already, it's not a deposit situation like presale condos but Ranchlands, unlike most, are not giving limits on when you have to build. We were told one couple bought in anticipation of retirement a few years down the road when they will then build. Given the market indicators I'm surprised someone would do this. We're going to wait.

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betamax

A — you're absolutely right, prices in the Okanagan and the Island are going to fall like a crowbar down a well.

Vancouver prices will correct also, but still not as badly as these podunk BC towns. In Vancouver, we actually have some decently paid jobs and industries which are unrelated to RE and construction…

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Anon

http://www.reportonbusiness.com/servlet/story/RTG…

This won’t help the housing market….. 7/10 in Canada have a mortgage.

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Vansanity

This is too funny, it's from the Rick Mercer Report and its about Vancouver being the most liveable city in the World. Has some hilarious moments poking fun at our insane real estate prices, most of which look even less than today's stupid numbers. Anyway, enjoy it!

http://www.youtube.com/watch?v=XH3IIzpwEhk

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Inwonderment

Someone I know just bought a condo in Mont Tremblant near the lake for $99,000 – Penticton for $400,000, we are paying a tremendous price to live in this province.

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arbitrage

Anyone want to fill me in on how to value a recreational property?

If we're doing it like regular housing, anyone have estimated rents and percentage of time occupied type numbers?

I wouldn't mind a Whistler condo/cabin in the future (after 2010) – what's the occupancy level on that type of thing (besides your own visiting)? I suppose time share is an option.

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Bankerman

Cost of money is a key critical component for the price level of real estate. When mortgage rates skyrocket upwards today in Canada, this will further compound problems for those holding debt. Recreational properties will be the first to be dumped as mortgage rates continue their climb. US long term rates are headed much higher to support the US dollar, but most Canadian real estate buyers are unaware that the Canadian mortgage rates are based off the US bond market. Sell now before you get clobbered later.

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Thums up2

Tayman, Stop wasting your time looking at usa,uk- when we say CAPITALISM some bunch of jokers fly around with big trunks of money. Did some one say rich people are not stupid? They are the one flying across the borders. Few month ago we had a servey over here on the issue- if any body want to buy across the border?most people were agreed with job but nothing else. I mean to say most of posters are middle class and poor class,we shouldn't be looking at any cycle or correction,if anybody can afford monthly payment just buy a place for your self because those flying monkey will be back to buy your property at any price again to repeat the cycle some where again and again- if you believe in cycles but I don't believe. Those idiots can grab the… Read more »

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franko

L8Bloomer,

You should be able to pick those lots at a 40% discount by Oct. 09.

Any weirdo lots with obvious flaws could drop over 50%, but should be avoided, as the flaws are permanent and will complicate future resale ….sorta like that place Chipman is trying to unload on East Kent in an industrial slum.

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Tayman

Here's a link to an interesting article about the UK housing bust.

http://www.newstatesman.com/economy/2008/06/house…

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Mike

L8Bloomer, try to hold out another 18 months, recreational properties should be the first to plummet.

I havn't been to the Okanangan in a while, are there lots of new developments there, is it like condos dt, just pre sales all over the place?

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L8Bloomer

We just went through the Okanagan this past weekend looking at lots on Nicola Lake. We also checked out Ranchland Lots. It's a very interesting concept. I wonder what the future of that place will be given that things seem to be slowing down. One acre lots in that area (Ranchland and Nicola Lake Estates) are around $350k (up to $620k for up on the plateau with a view). We are interested in buying there but are willing to wait and see what happens to prices over the next year. Any guesses/advice?

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Warren

I think price corrections will come to the Okanagan, no doubt.

I've been looking casually at Gulf Island properties, along with Hawaii and Las Vegas. Sadly the top locations are still very expensive. Still waiting and hoping…

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