Okanagan market poised for comeback, conference told
Consider the Okanagan, where prices have dropped sharply in recent years but are due for a rebound. That's the message from several panel members at a real estate conference session looking at secondary markets in B.C., which have been hit hard by the recession.
"I'm a believer in the future of the Okanagan," Bob Glass, a principal partner with Vancouver-based MacDonald Development Corp., which has major Kelowna holdings, said in an interview at the Vancouver Real Estate Forum held in downtown Vancouver Thursday. "The Okanagan has trailed the Vancouver market for a year or so. And I think Kelowna is the best bet."
Glass, one of five panel members at a session looking at opportunities in B.C. secondary markets, said some prices have dropped in Kelowna by as much as 60 per cent, but that things are starting to change.
He cited one development that saw just six housing starts in 2010, but 21 so far this year.
"Secondly, construction costs are at an all-time low. A year from now, prices will be up."
He noted that the Alberta economy is looking up, with signs of renewed interest from that market in the Okanagan.
Glass said that resort developments need to emphasize "lifestyle" as buyers remain very cautious and are much better informed than just a few years ago.
"Any new development has to offer amenities, [such as] pools, gyms. To get their attention, you have to provide those amenities."
Panelist Ward McAllister, president and CEO of Ledingham McAllister Properties Ltd., agreed that Kelowna is the place to invest. "There's a lot of bankforced sales there. There's terrific deals. And the market will come back." He said that while much of the Vancouver market has been driven by Asian investment in recent times, it will soon impact other areas as well.
"There are people migrating to our province with money and buying homes," he said. "This will have a ripple effect in Kelowna, Victoria, Nanaimo, and it will certainly benefit those markets."
However, he doesn't see many new Asian immigrants moving into secondary markets for now. "[They] are mesmerized by Vancouver. They know it's the most sustainable, livable city in the world [and] it's the place they want to be."
Michel Tremblay, managing broker, Okanagan and Revelstoke, Sotheby's International Realty Canada, said he did 10 deals in March. "In the Okanagan, that's substantial."
Drew Meredith, founder of Whistler Real Estate Company Ltd., said the Whistler market hasn't seen any post-Olympics bounce.
"We're an international resort and rely on international customers. And they're not coming.
"The Olympics did some incredible things for the Sea to Sky corridor, starting with the highway. It's so straight, so nice and accidents have actually dropped 60 per cent since they completed the highway.
"[But] we're still waiting for the uptick. The U.S. is clearly our problem child, so is Britain, although we're looking for other markets."
Meredith said one issue is that there's no more land left to develop in Whistler because it's reached it's housing development cap. Andrew Turner, president of Invermay Real Estate Advisors, said that in Victoria, buyers are moving toward smaller, affordable units and that young families and seniors are pushing the market.