Saltspring properties hold their value
Recreational property market stabilizes, but Saltspring and Tofino still pricey
Carla Wilson -Times Colonist - Published: Tuesday, June 10, 2008
Canada's recreational properties are returning to more balanced market conditions as more listings come on the market but Saltspring Island properties are holding tight to their value.
That's because demand has increased for B.C.'s Gulf Island properties where the Islands Trust conservation rules have capped growth, said Li Read, of Re/Max Realty of Saltspring Island. "It's a limited inventory." Fly over the Gulf Islands to see "an awful lot of green," Read said Tuesday. "The Trust has done a wonderful, wonderful thing."
A new Re/Max report released Tuesday said that nationally, it found a "substantial increase" in the supply of recreational properties listed for sale, as 91 per cent of the areas it surveys were moving from being sellers' markets to something more favourable to buyers.
Exceptions were Salt Spring Island, two markets in Saskatchewan, and Newfoundland's east coast, the report said. Saltspring Island sales are down slightly from last year but the average price has held steady since 2005, the report said. Most homes sold so far this year were betwen $600,000 to $900,000. The company cited a starting price of $1.3 million for a three-bedroom waterfront house. Read said that the advent of the Internet, "opened a global market because it erased geography," Read said. Canadian buyers are often from Alberta or Ontario, while international buyers may be from the U.S. or Europe.
Saltspring is the Gulf Island where property owners can live year-round if they wish because its amenities make is a stand-alone community, she said. Rather than get-away cottages, properties are typically second homes for buyers looking three to five years in the future. This region's climate and terrific sailing among the Islands attracts buyers, Read said.
Outside of Saltspring, there are more affordable properties for sale in B.C. Re/Max regional executive vice-president Elton Ash said the demand for B.C.'s waterfront recreational properties remains strong, but prices have stabilized, leading to fewer multiple offers pushing up prices. Bargain U.S. real estate has reduced the number of buyers looking at Canadian recreational properties, he said. "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." Across the country, affordability, rising energy prices and Canada's faltering economy have dampened demand, Ash said. As a result, "sixty-seven per cent of markets reported softening in the number of sales year-to-date," Ash said, blaming part of that on tough winter conditions earlier this year.
"Over the last decade or so we have seen across-the-board double-digit price increases for recreational properties," said Re/Max spokesperson Christine Martysiewicz, crediting the prosperity of the baby boomers and the longest period of expansion since the Second World War for that boom.
"The recreational market continues to experience solid demand - a trend that is expected to continue throughout 2008, said Michael Polzler, executive vice-president and for Re/Max Ontario-Atlantic Canada.
The trend hasn't dented property values in Tofino, where the starting price for a three-bedroom winterized recreation property is a cool $2 million, the highest price in Canada. Nor has it depressed values for Sylvan Lake north of Calgary, where prices have climbed to $1.25 million in 2008 from $1 million in 2007 for a similar three-bedroom affair.
Alberta's oil-fuelled prosperity has in fact helped drive up property values in British Columbia, Atlantic Canada and some parts of Ontario, according to the Re/Max report.
- With files from Canwest News Service
This is not an offering for sale. An offering for sale can only be made in accordance with a disclosure statement.