BCAdvantage 2008; Business and investment across British Columbia

Since 1997, the average sale price of rural vacation land in British Columbia has skyrocketed 141%, and the average price of waterfront property has increased 237%. The typical urban house price, as a comparison, increased just 114% in the same period. In some prime markets, recreational appreciation was even faster. If you had bought a typical waterfront lot on Okanagan Lake in 1997 for $270,000 and sold it last year, you could have pocketed a profit of more than $1 million.

“British Columbia recreational land is a blue chip investment,” said Rudy Nielsen, president of Niho Land and Cattle Co. and owner of Landcor Data Corp., which tracks every property title transaction in B.C.

Nielsen noted that there are only 250,000 titles that could be considered recreational property in B.C. ”The demand is way above the supply.”

That demand is largely being fuelled by Canada’s changing demographic as aging baby boomers flex their economic muscle. The grey wave has altered B.C.’s recreational market, and led to changes in how and where vacation property is being sold.

“A few years ago, a recreational property buyer was someone who planned on using the place two to four weeks a year, so developers tried to work in rental packages,” said Cary Fisher, a partner in Redstone Resort in West Kootenay. “Now the typical buyer is a retiree who plans on living in the property, or at least spending months there. They want bigger, more luxurious homes.”

Added Elton Ash, regional director for Re/Max of Western Canada: “Baby boomers are investing in recreational land from both a lifestyle perspective and an economic standpoint. Given the aging of the population, this trend is expected to continue for at least the next 10 years, as baby boomers move through the cycle.”

The annual 2007 Re/Max Recreational Property Report notes that boomers – born between 1946 and 1965 – represent about one-third of Canada’s population and control approximately 45% of its wealth. They collectively own $230 billion in real estate assets and have a net worth of $530 billion.

Island desires

The demand for B.C. recreational property is seen most clearly on Vancouver Island, considered a retirement haven. In 2007, despite a giant strike that idled forestry, the value of recreational real estate rose an average of 15% from a year earlier. More telling, major forest companies began to sell off thousands of acres of forestland, touting it now as prime recreational property. TimberWest, in an online auction in January, sold 14,000 acres of Vancouver Island, including waterfront parcels.

The sale of 500 acres of former Weyerhaeuser land sparked the development of the Jack Nicklaus Golf Club Canada course at Ucluelet’s $650 million Wyndansea development by Marine Drive Properties Ltd., which is slated to open in mid-2008.

Condos at Wyndandsea sell for more than $500 a square foot, and building lots start in the $800,000 range.

Now global forestry giant Weyer-haeuser is developing its forestland into resort property at Ucluelet, making the former forest and fishing town one of the hottest recreational plays in the province.

Recreational gold mine

Another white-hot recreational market this year is the Kootenays, where investors are pouring millions of dollars into resort development.

The most recent is the purchase of the old Fairmont Hot Spring by Ontario-based Ken Fowler Enterprises (KFE). KFE has big plans and deep pockets, explained Richard Hawarth, KFE’s project manager at Fairmont.

Under a proposed $100 million master plan, KFE will upgrade the existing three golf courses, improve the ski facilities and prepare land for 50 fully serviced building lots priced in the $250,000 range. There are also plans for luxury townhomes and condos and a flagged resort hotel, to be built on an estimated 1,500 acres of land available for development.

Meanwhile, Revelstoke Mountain Resort has just released the first estate lots that accommodate private helicopter pads. The 25 lots range in size from a half an acre to an acre and a half, with prices from $650,000 to $1.5 million.

The pricey lots are part of a $1 billion development at Revelstoke that will see more than 5,000 new homes built over the next 15 years. More than 50% of buyers are coming from the U.S. and overseas, according to Don Simpson, the developer of Revelstoke.

There are still some lower-priced recreational opportunities in B.C. for those willing to drive or fly further afield, according to Nielsen.

These include:

Kamloops District: The massive Tobiano resort is creating a multimillion-dollar waterfront development on Kamloops Lake, but there are some low prices for riverfront and lakes throughout the district. Freehold riverfront on the Thompson River, even acreage parcels, with houses, sell or under $300,000. Just four hours from Vancouver, the area has good upside potential.

The Cariboo: In the Quesnel area, which has seven lakes within a few miles of the town, the median price of waterfront property is $220,000. At Williams Lake, the median price has doubled in the past year, to a median of about $320,000.

Northern B.C.: The attraction here is the influx of Alberta buyers, who have been driving prices up. Local lakes are a 12-hour drive from the Lower Mainland, but offer low prices, large acreage parcels and appreciation potential. Median lakefront lot prices in the region are less than $100,000. •

TOP OF PAGE

Comments about this site should be sent to:
Business in Vancouver Webmaster
Copyright © 2008 BIV Publications Ltd.
102 East 4th Avenue, Vancouver BC V5T 1G2
Tel 604-688-2398 | Fax 604-688-1963
Terms of use for this site.