They may quote slightly different numbers, but real estate market watchers seem to agree that the Sunshine Coast is starting to feel some of the heat from the Lower Mainland’s exploding housing prices.
Some analysts have also suggested the Sunshine Coast market, as well as markets in places like Qualicum Beach, Nanaimo and Victoria, is being driven by more than just high demand. They’ve seen a demographic shift, as aging baby boomers “cash out” of their high-priced Lower Mainland properties.
Gary Little, a real estate agent who’s been closely tracking Sunshine Coast market statistics since 2009, says that matches what he’s seeing.
“In general, most of my clients tend to be in their 50s or more,” Little said. “That’s actually been quite common for some time. But I can tell you the last few deals I’ve done, the clients came from Vancouver, Port Moody, Delta and North Vancouver.”
Little also believes it’s driving up prices to their highest levels in years, with more properties going for prices above asking than before.
“They [Vancouver-based buyers] came over here and sort of caught us by surprise. They initially took up the best properties and the inventory goes down. And, there’s more people coming and they’ve got money, so it drives the prices up … I see it day-to-day,” Little said.
“What we’re seeing now is the asking price is starting to inch up, we’re seeing activity, we’re seeing quick sales.”
Realtor Kenan MacKenzie told Coast Reporter his experience has been a little different. He said he’s definitely seen a spike in activity, high prices and even bidding wars. But he’s not convinced older baby boomers selling expensive Vancouver real estate and using the profits to buy here is the biggest reason behind it.
MacKenzie said he’s seen younger buyers bypassing the overheated Lower Mainland market altogether and looking to the Sunshine Coast for more affordable options, and the hottest market segment is properties under $500,000. MacKenzie also said other factors are coming together to drive the Coast market higher.
“I think we’ve set ourselves up for the perfect storm,” he noted. “We have Chinese investors on the Sunshine Coast who have bought into business and are buying homes to live here, you’ve got young people trying to move [here], you’ve got the boomers trying to move [here], you’ve got Americans potentially coming back into the marketplace.”
Both men agree that the market conditions are unprecedented and it’s largely a case of simple supply and demand. MacKenzie and Little estimate the stock of detached homes on the market right now is about 300, which is fewer than needed to fill the needs of potential buyers.
The Real Estate Board of Greater Vancouver’s latest numbers show the benchmark price of single-family detached home on the Sunshine Coast hit $399,600 in February, up 13.8 per cent over last year. Little uses a slightly different method to crunch the data, and his analysis shows a median price (meaning half of the sales were higher and half lower) of $451,000 in February, with a “12-month rolling average” of $427,026. No matter which number you use, it’s a significant increase.
“In 21 years as a realtor I’ve never seen a market as active as we have now, because basically there’s more buyers than we have product for,” MacKenzie said.
According to Little, one key difference between the Lower Mainland and Sunshine Coast markets is the motivation of the buyers. He said the fears over speculation being seen in the Vancouver area aren’t being reflected here.
“They’re actually moving, I don’t think we’re seeing any speculation over here. I don’t think anybody’s buying over here and saying, ‘I’m going to sell again in three months for more money,’” Little said. “Most people are coming over here to live.”
While an influx of buyers of any sort is good news for people with property to sell, the possibility that the trend-behind-the-trend is accelerating the growth of the 60-plus demographic on the Sunshine Coast creates challenges.
Projections from BC Stats say the proportion of people over 60 on the Sunshine Coast will hit 39 per cent by the end of this year, compared to 33 per cent in 2011. By contrast, the percentage of people 30 to 59 is expected to drop from 41 per cent in 2011 to 36 per cent by the end of this year.
Anne Titcomb of the Sunshine Coast Seniors Planning Table told Coast Reporter the demographic shift is something recent Vital Signs reports have predicted, and getting ready for it was one of the reasons the Planning Table was formed.
Titcomb said while the obvious impact is a need for more services for seniors and planning approaches that take an aging population into account, the change could also affect the younger demographic the area is trying to attract.
“With the rise in the cost of housing that seems to be happening here now, I worry about the tipping of the scale – it’s never good to have a big imbalance in population – but I’m more worried about the ‘worker bees’ being able to afford housing now,” Titcomb said.
“We want to have people available to support seniors.”
That’s a worry for MacKenzie, too. As increased demand leads to more construction, he said, builders could see a shortage of workers in the trades, and those who move here to fill the gap could have a hard time affording homes.
– See more at: http://www.coastreporter.net/news/local-news/demand-driving-up-real-estate-prices-1.2195229#sthash.Jpt6rTAa.dpuf – See more at: http://www.coastreporter.net/news/local-news/demand-driving-up-real-estate-prices-1.2195229#sthash.Jpt6rTAa.dpuf
Original Publish: http://www.coastreporter.net/