The California Gold Rush Moves North…

Source – theglobeandmail.com

  • “…Foreign buyers, particularly Americans from the West Coast, are scooping up waterfront properties. Like others in the industry, Victoria realtor Logan Wilson, who’s with Sotheby’s International Realty Canada, suspects that part of the demand is coming from those seeking refuge from extreme heat and water shortages….these areas look better to them. A lot of buyers are relocating out of California”

Emerging luxury housing market on Vancouver Island puts hidden gems on the map

Kerry Gold, July 9, 2021

The 9,000 square-foot home at 2426 Andover is listed for $7.6-million. Sotheby’s International Realty Canada

Amid the pandemic, a luxury market has emerged on Vancouver Island – driven by wealthy people seeking a more temperate climate and better lifestyle. Towns and even villages that had long been hidden gems are suddenly very much on the map.

Foreign buyers, particularly Americans from the West Coast, are scooping up waterfront properties. Like others in the industry, Victoria realtor Logan Wilson, who’s with Sotheby’s International Realty Canada, suspects that part of the demand is coming from those seeking refuge from extreme heat and water shortages.

“I’m booked for weeks in advance at the moment,” says Mr. Wilson. “It’s fascinating. I can only speculate on why these things are happening. My gut instinct is that it’s weather related, government related, security related, water related. In the western U.S., you have massive wealth in those areas from tech industries and there is a tech industry here in Victoria you can join.

“I think with the heat wave happening down there, the drought, that kind of stuff, these areas look better to them. A lot of buyers are relocating out of California.”

Vancouver Island, of course, has experienced record-breaking temperatures over the past 10 days, part of the heat wave that has enveloped the West Coast — though the temperature is now going down. Mr. Wilson points out that usually its climate is relatively temperate compared with areas south of the border that are experiencing extremes.

“You can come here and water your grass and take a shower and do what you want, whereas [in parts of the U.S.] you have a moratorium on water use,” and much higher temperatures, he says.

Mr. Wilson recently made a record-setting sale for the Victoria region when he sold an opulent 67-acre waterfront estate for $12-million. The new owner of the 10,700 square-foot house will have space for 15 cars, guests with a separate residence, a caretaker and a boat that can be mechanically moved from boathouse to launch pad at the press of a button. They’re also looking at a $20,000 tax bill.

But considering the house cost more than $20-million to build, it’s a bargain, says Mr. Wilson, who could not reveal the buyer.

He also just listed another waterfront property near Parksville in Nanoose Bay, population 6,000. The 9,000-square-foot home at 2426 Andover is listed for $7.6-million, a record for the community. The bare lot sold in 2016 for $500,000. They’ve already received significant interest, and he’s lining up showings around end of July or early August. (The Canada-U.S. border is currently closed to non-essential travel until July 21.)

The interest for such properties, he said, is mostly from high net worth individuals from the U.S. and Europe.

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Inside the 2426 Andover Rd, Nanoose Bay home. Sotheby’s International Realty Canada

Douglas McGowan, a Sotheby’s agent with 28 years of experience, says they’re selling $3-million-plus homes sight unseen to foreign buyers.

“I would go one step further than Logan [Wilson] and say the buyers are not just from California, but right up the coast, from Oregon, Washington. We are seeing a lot of Washington professionals buying on the Island, and the whole west coast of the U.S.,” Mr. McGowan said.

“We sold two or three high-end properties virtually to Americans from the west coast. In one case, our agents did a Face Time tour through the property. In another case, they bought off our MLS stat sheets and a whole bunch of photographs. And these were over $3-million, so it’s pretty good confidence in real estate on the Island.”

Mr. McGowan guessed that the foreign buyers are looking for secondary residences – a bolthole with low crime, a slower pace and abundant water.

At one time, buyers going north of Victoria were usually retirees looking to get away from it all. Now, younger buyers are flocking to towns like Qualicum and Parksville and Courtenay, and the rich are seeking out remote and idyllic spots. (There are private fishing lodges where you have to fly to gain access.) Forty-five properties over the $3-million mark sold in the past year, which is significant for an island with a population of nearly 1 million, Mr. McGowan says.

“There are lots of hidden gems on the Island that are secretive and quiet,” he adds.

For example, Sotheby’s just listed a property on the west coast of the island, close to the village of Tahsis, an old-growth paradise for fishing and oyster harvesting. It is accessible by an old logging road or by 40-minute boat ride to Nootka Sound. There is no house on the lot, which has 1.5 km of sheltered waterfront on the western side of the island and full ocean exposure. This 186-acre recreational property is listed for $2.2-million and it has its own 55-kw generator, RV shelter, workshop, bunkhouses and tiny cabin.

“You have to … get on a dirt road and a beaten-down path. It will take some work to develop out there,” Mr. McGowan says.

This 186-acre recreational property is listed for $2.2-million and it has its own 55-kw generator, RV shelter, workshop, bunkhouses and tiny cabin. Sotheby’s International Realty Canada

Mr. Logan says there are large bolthole estates on the Gulf Islands as well, but those seldom change hands.

Luxury aside, the entire market “has peaked” all across the Island, he adds. The Vancouver Island Real Estate Board reported 27-per-cent price hikes on a typical single-family home in the past year. Prices in the capitol region of Victoria rose 17 per cent, bringing the benchmark price of a house to $1,036,100 in May. And it isn’t just a capital region phenomenon. In the city of Campbell River – a three-hour drive north of Victoria – house prices rose 30-per-cent year over year, bringing the typical price to $614,400.

Neighbouring Parksville and Qualicum, once a quiet refuge for retirees, are now the second most costly communities outside of Victoria, says Royal LePage realtor Richard Plowens.

In Parksville, he and his realtor sister Susan Forrest recently received 12 offers for a rural rancher at 976 Maple Lane Drive. It sold for $1.2-million – $200,000 over asking. In 2012, the house sold for $482,500.

In the past year, houses in the area have typically gone up $100,000, Mr. Plowens says. The price hikes are largely because of demand outpacing supply. They usually have around 600 listings on the market, whereas now they have only one-third that amount, he notes.

The pandemic, he adds, has also put a lot of small communities “on the map” for people outside the region. Now, he says, the lowest price for waterfront property on the Island is about $1.5-million, and that would be a fixer-upper.

“We’re listing homes, and it’s very hard to determine market value because there’s a consumer coming from outside the area and proving everyone wrong,” says Mr. Plowens. “We usually tell clients, ‘It should sell between this point and this point,’ but anything can happen. Someone comes in as a white knight and puts extra money on the table, and without conditions.”

But he doesn’t think the dynamic is sustainable.

“We deal with all age groups and younger buyers here are feeling the pinch. The mortgage rules have tightened up and they have limits on what they are allowed to spend. And we need young people to keep a community going,” Mr. Plowens says.

“There are good and bad things about this market for sure … but there is nothing normal in real estate.”

https://www.theglobeandmail.com/real-estate/vancouver/article-emerging-luxury-housing-market-on-vancouver-island-puts-hidden-gems-on/

Categories: British Columbia

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