{"id":20403,"date":"2022-08-12T15:15:00","date_gmt":"2022-08-12T22:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=20403"},"modified":"2022-08-12T08:30:12","modified_gmt":"2022-08-12T15:30:12","slug":"price-reductions-amid-a-growing-inventory-of-bc-recreational-properties-outlook-remains-solid","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/08\/price-reductions-amid-a-growing-inventory-of-bc-recreational-properties-outlook-remains-solid\/","title":{"rendered":"Price Reductions Amid A Growing Inventory of BC Recreational Properties, Outlook Remains Solid"},"content":{"rendered":"<p style=\"text-align: justify;\">The outlook for BC recreational property remains solid, with brokers saying some of the strongest markets in BC are now providing a haven against the turmoil roiling residential markets at large.<\/p>\n<p style=\"text-align: justify;\">According to Re\/Max Canada, high prices for BC recreational properties were set to rise even further when it surveyed national markets earlier this year. Tofino, Ucluelet and the South Okanagan were among the strongest, with prices forecast to rise 5%.<\/p>\n<p style=\"text-align: justify;\">But a succession of rate hikes by the Bank of Canada has cooled the market, slowing home sales and prices while boosting inventories.<\/p>\n<p style=\"text-align: justify;\">Recreational properties in many areas remain in demand, however, with rapid price increases giving way to modest price declines as inventories have yet to loosen.<\/p>\n<p style=\"text-align: justify;\">\u201cWe think there will be some adjustment in price, but it won\u2019t be very big, maybe 5%, because of the lack of inventory,\u201d said Judy Gray, who co-owns and co-manages Re\/Max offices in Port Alberni, Tofino and Ucluelet. \u201cWe don\u2019t think they\u2019ll go below 2021 prices. It will take a very big recession; more interest rate increases and more fear [for that].\u201d<\/p>\n<p style=\"text-align: justify;\">Tofino house prices averaged $1.7 million in the first quarter of this year, up 51% from a year ago. In Ucluelet, prices averaged just over $1 million, up 42% from a year earlier.<\/p>\n<p style=\"text-align: justify;\">It\u2019s a similar story in other key markets that have seen an influx in buyers in recent years. Brokers in the Okanagan expected prices to remain relatively stable thanks to limited supply and the desirable nature of the region, which remains one of the fastest growing in Canada.<\/p>\n<p style=\"text-align: justify;\">\u201cWhenever we have these downturns in the economy, we typically \u2013 the last few \u2013 have not suffered as bad as most other areas, just because of the desirable nature of where we are,\u201d said Jerry Redman, owner and managing director of Re\/Max Kelowna. \u201cSupply is probably our biggest problem, and that\u2019s why the prices went up as much as they did because we couldn\u2019t put anything on the market.\u201d<\/p>\n<p style=\"text-align: justify;\">That isn\u2019t changing, especially as construction prices rise and starts slow as developers assess the market.<br \/>\n\u201cI think we\u2019re going to see our recreational stuff slow and stabilize &#8230;.. more than we\u2019re going to see a drop in prices,\u201d Redman said.<\/p>\n<p style=\"text-align: justify;\">A key factor is that the kind of buyer seeking recreational property typically has discretionary income and is less vulnerable to cost-of-living pressures and interest rates.<\/p>\n<p style=\"text-align: justify;\">\u201cThere\u2019s not many guys out buying a $4 million house that really care about the interest rates,\u201d Redman quipped.<\/p>\n<p style=\"text-align: justify;\">Many buyers also bring significant equity from larger centres where property values are higher.<\/p>\n<p style=\"text-align: justify;\">Tofino and Ucluelet have seen a notable influx of buyers over the past three years from Squamish, Gray said. Squamish property values rose as people left Metro Vancouver. Now, owners are cashing out and moving to Vancouver Island where a similar outdoor lifestyle and entrepreneurial ethic prevails.<\/p>\n<p style=\"text-align: justify;\">\u201cWe call it the \u2018Squamish invasion,\u2019\u201d she said. \u201cA lot of those people that are coming from the bigger centres raise their families, then you\u2019re finding that the grandparents are following.\u201d<\/p>\n<p style=\"text-align: justify;\">While activity has slowed in recent months, Gray said this isn\u2019t uncommon in summer.<\/p>\n<p style=\"text-align: justify;\">\u201cThe demand for housing is still very high, and there\u2019s a lot of buyers on the sidelines,\u201d she said.<\/p>\n<p style=\"text-align: justify;\">She doesn\u2019t expect people scouting properties now to close on deals until they see what the fall brings.<\/p>\n<p style=\"text-align: justify;\">She doesn\u2019t expect demand to ebb, but she doesn\u2019t expect prices to roar back, either.<\/p>\n<p style=\"text-align: justify;\">\u201cI don\u2019t see us rising again for a bit [but] I don\u2019t think we\u2019re going to lose a lot of what we\u2019ve gained,\u201d she said.<\/p>\n<p style=\"text-align: justify;\">One exception may be the South Okanagan, which enjoyed strong growth during the pandemic but was forecast in this spring\u2019s report from Re\/Max to see a 20% decline in recreational property sales. The driver was initially a lack of inventory but now it\u2019s a lack of buyers despite a relatively affordable average sale price of less than $650,000.<\/p>\n<p style=\"text-align: justify;\">Karrie Grewal of Crush Real Estate in Penticton said Spirit Ridge in Osoyoos had 25 listings in early August. A year ago, there were none. Waterfront properties that come onto the market are no longer seeing multiple offers, a contrast to the heady days of the pandemic when Grewal sold more than any time previously.<\/p>\n<p style=\"text-align: justify;\">\u201cWe\u2019re seeing more price reductions than we\u2019ve ever seen,\u201d she said.<\/p>\n<p style=\"text-align: justify;\">The first week of August saw 93 price reductions, for example. Grewal handled a listing where the price dropped from an optimistic $2.1 million in June to $1.7 million in August.<\/p>\n<p style=\"text-align: justify;\">\u201cIt was probably a little ambitious,\u201d she said. \u201cBut now they\u2019re just chasing the market down.\u201d<\/p>\n<p style=\"text-align: justify;\">Three-year-old restrictions on short-term rentals in Oliver and Osoyoos have been joined by similar bylaws in Kelowna last summer and in Summerland this spring.<\/p>\n<p style=\"text-align: justify;\">\u201cWe had three people looking for vacation properties in Summerland up until that bylaw came down,\u201d Grewal said. \u201cIt changes everything, and then we end up with more inventory on the market and now we\u2019re looking for the full-time resident instead of the vacation buyer.\u201d<\/p>\n<p><a href=\"https:\/\/biv.com\/article\/2022\/08\/prices-bc-vacation-homes-dip-despite-steady-demand\" target=\"_blank\" rel=\"noopener\">Prices for BC Vacation Homes Dip Despite Steady Demand<\/a> by Peter Mitham | Western Investor | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The outlook for BC recreational property remains solid, with brokers saying some of the strongest markets in BC are now providing a haven against the turmoil roiling residential markets at &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/08\/price-reductions-amid-a-growing-inventory-of-bc-recreational-properties-outlook-remains-solid\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-20403","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Price Reductions Amid A Growing Inventory of BC Recreational Properties, Outlook Remains Solid &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/08\/price-reductions-amid-a-growing-inventory-of-bc-recreational-properties-outlook-remains-solid\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Price Reductions Amid A Growing Inventory of BC Recreational Properties, Outlook Remains Solid &#8226; 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