New Report concludes that buyers are still cautious, but lower prices are getting them off the fence
There's renewed post-recession interest in B.C.'s recreational property market and it's largely from young families attracted by lower prices.
"The local market has softened and prices have come down because of that," lower prices have stimulated interest with modest increases in sales in all regions except the North Okanagan, which was off last year's pace following a slow start to the season.
"The baby boom demographic has been investing their recreational dollars in Arizona and California rather than B.C. But younger families are confident in buying here because prices have softened. They really want to improve the quality of family life."
The annual report released Monday looked at trends in 33 markets in all 10 provinces.
Buyers are still cautious, but market conditions including lower interest rates have placed them in the driver's seat with activity also prompted by pent-up demand that's been building since 2008 - when many people shifted to the sidelines.
Inventory levels are adequate, allowing buyers to take their time before buying.
Many of the buyers are seeking properties off the water, with renovations of older cottages common.
According to the report, prices are not only down from 2009, but also generally down from 2011.
In the North Okanagan, the starting price for a three-bedroom winterized recreational property on a standard waterfront lot was $900,000 in 2012, down from $1.2 million in 2009 and $995,000 in 2011.
In the South Okanagan, an equivalent property sold for $800,000 in 2009 and again in 2011, but $610,000 in 2012.
However, that property at Cultus Lake rose from $450,000 in 2009 to between $800,000 and $1 million in 2011, before dropping to $650,000 in 2012.
On Vancouver Island, prices rose slightly from $789,000 in 2009 to $825,000 in 2011 before going down again to $795,000 in 2012.
On Saltspring Island, prices dropped sharply from $890,000 in 2009 to $669,000 in 2011 and $597,000 this year.
In Whistler, the starting price for a mountain chalet also dropped, from $799,000 in 2010 to $700,000 in 2012.
Regionally, Ash said that prices have dropped in the Gulf Islands partly because Americans are buying there in lesser numbers, while the Shuswap and areas closer to the Alberta border have stabilized because of a moderate increase in interest from Albertans.
In Whistler, there's less interest from both European and U.S. buyers, with many of the sellers also Americans trying to unload their vacation properties.
For the North Okanagan, the report noted that despite significant price reductions (down 30 per cent from peak levels in 2007-08), activity has been slow.
"Weather's played a part, with plenty of rain dampening purchaser enthusiasm this spring," the report concluded. "The market has lost a fair share of recreational/investor buyers to the southern U.S., taking a bite out of the boomer/retiree purchasing pool.
"The bulk of those making their moves now are Albertans - most with young families."
Meanwhile, Rudy Nielsen, president of NIHO Land and Cattle Co. in New Westminster, which specializes in recreational land purchases, development and sales, agreed that sales are up this year with lower overall prices.
"It's increased from last year, but it's still not where it was," said Nielsen. "Everything can be negotiated."
He said while most buyers are B.C.-based, there's also renewed interest in some properties from European buyers. "And for the first time, we're seeing Chinese money in oceanfront properties."
He said many Metro Vancouver residents have sold their homes at a profit over the past two years and used some of the money to buy a vacation home in the Interior.
Nationally, the report found that Canadian recreational property markets were reinvigorated in 2012, with softer values, more selection and an upswing in sales.
It said sales were ahead of last year's levels in 70 per cent of communities examined, with lower prices recorded in 49 per cent of markets.