Timing is everything in real estate. Every homeowner dreams of finding the perfect opportunity to sell high and buy low. But as it turns out, this situation is extremely rare, and often requires a change in marketplace. For Albertans, the dream of selling high seems to be fleeting thanks to a sudden decline in the real estate market that is causing many to worry about a compromised retirement. But from our perspective, Albertans are sitting on an incredible opportunity to capitalize on the growth they experienced over the past five years. Homeowners in Alberta are actually able to do exactly what we all dream of doing- selling high and buying low, by simply shifting their focus west. Vancouver Island is Alberta's real estate counterpoint: a stable market poised for growth, with the added bonus of warmer weather.
Alberta’s downward real estate trend, combined with job loss and attrition following on the heels of record-breaking appreciation over the last five years, is leaving many concerned about the stability of their investments. Oil prices have dropped to a point not seen in decades, which has cast a significant shadow on residential sales. In 2015, home sales volume dropped -21.3% for Alberta as a whole, and prices dropped -1.9%. Not so bad yet, but prices are forecasted to drop another -3.44% in 2016, according to the Calgary Real Estate Board. And when prices drop, luxury homes are the hardest hit, not to mention the the first 20% decline generally represents the homeowner’s equity.
In contrast, central Vancouver Island, the only warm climate region in Canada with average house prices in-line with the rest of the country, is experiencing the opposite: a positive change in house values after 5 years of decline, and a growing, diversifying economy.
Vancouver Island is finding itself in a perfect storm, thanks to a number of changing conditions. Recent changes to U.S. snowbird laws limits the total number of days a Canadian citizen can stay in the U.S. before having significant tax implications. When combined with a rising U.S. dollar, this means fewer Canadians are heading south to purchase retirement homes. With a growing number of baby boomers looking for a place to land, this presents a significant number of Canadians looking for both a mild climate, and a safe market to preserve their net worth. Due to the low prices relative to the rest of B.C., mild winters, spectacular natural beauty and outdoor recreation, central Vancouver Island is becoming more and more attractive, investment-wise.
Just 35km away, Vancouver is experiencing astronomical real estate prices that show few signs of slowing, leading to more and more families looking for affordable coastal communities to call home. All these factors, combined with a growing infusion of Chinese investors also looking for a stable investment opportunity, leaves the central Vancouver Island real estate market on the precipice of significant growth. For Albertans, the timing couldn’t be better to cash in on the oil boom before prices drop further, and put their capital back to work in a real estate market with positive momentum.
But not all opportunities in central Vancouver Island are equal. For example, Parksville and Nanaimo are booming with double digit increases in new construction, where other nearby communities may not offer the same growth projections. As such, it is essential to access expert, local advice before assuming all opportunities are the same.
“Now is the time to buy in an area that is set for long term stable appreciation,” says John Cooper, principal at Cooper, McLintock & Associates. “There is no better team than ours to help you get the home you want on Vancouver Island. Our team can also help you build a plan to sell your house in a challenging marketplace. We know the agents who are having the most success in Alberta.”
We invite you to reach out and let us help you put a plan together to maximize your sell price and minimize your buy price, while getting you where you want to be, sooner.