Record home sales fueled by recreation, retirement

B.C. home sales set a record for the month of July as strong sales spread beyond traditional hubs of activity.

"When we look at the markets in B.C., we see demand spanning across the entire geography of the province," said Cameron Muir, chief economist at the B.C. Real Estate Association, in a phone interview. "This is very positive, but has not been the norm in the past."

According to the BCREA, residential sales volume in B.C. climbed 44 per cent, to $4.66 billion, in July compared to the same month last year. The number of actual residential units sold also increased 25 per cent to 10,477 units, breaking previous July records. Meanwhile, the average price of a typical single family home hit $446,386, up more than 15 per cent from a year ago.

Muir said that much of this growth is being supported by areas in the province with appeal to buyers of recreational and retirement properties. The Okanagan, Kootenay and Vancouver Island markets, for example, are all hopping.

"We expect this will increase as baby boomers get a little older and reach their retirement years," said Muir. "A lot of it is [the relatively warmer] climate and, in some areas, affordability [of these places]," said Muir.

The South Okanagan, for example, posted a 68 per cent increase in the number of residential units sold this July compared to July 2006, the highest percentage change across B.C.

Len Fox, who owns Re/Max Penticton, a real estate agency there, said that a "significant number of buyers are from out of the area. They are coming from the Lower Mainland, but mainly from Alberta."

What happens, he explained, is that when one out-of-town buyer makes a purchase, a chain of two or three more transactions is triggered in the local area. "Not many people think of that, but if someone from Alberta buys a farm or an orchard here, then that farmer moves to a house in a gated community. Then that homeowner has to move to a condo. And it goes on until someone goes to heaven or moves out of town," said Fox.

He said that "Vancouver and Calgary are big busy centres. We are still relatively small and appealing to buyers from there," adding that sales of properties on the lakeshore or those with wineries and orchards were mostly being made to out-of-town buyers. These buyers are also the ones scooping most of the $500,000 plus properties.

"There are a lot of recreational sales. And we are not talking about old cabins here," said Muir. Forget quaint little, crooked A-frame with an outhouse, he said. Think "two to three bedroom home that is well-appointed with all the modern amenities."

Many of these are centred around lifestyle amenities such as golf courses, near the water or parkland and those kinds of things. "It's actually very luxurious accommodation," said Muir. "Many of these recreational buyers are buying these in anticipation of having that become their principal residence once they retire," said Muir.

This kind of forward planning means that while recreational property used to be a niche in the market, it has "grown substantially and is a much larger proportion of the overall market than it ever has been," said Muir.

Published: Friday, August 17, 2007
It is only likely to grow even more in the next decade as the number of people in B.C. aged 65 and over is predicted to increase by 40 per cent, according to the B.C.R.E.A.

"This will drive housing market numbers and innovations in the kind of housing offered out there for this aging population," with more emphasis on adult lifestyle developments, said Muir

(prepared by Jo-Anne Lee-Younge/Vancouver Sun)