The Sunshine Coast real estate market has eased off its record-setting pace, according to the latest statistics from the Real Estate Board of Greater Vancouver (REBGV), but not enough to extinguish concerns about an over-heated market.
After peaking in March, April and May, sales numbers saw a downward trend, at least for detached homes, in June and July. But sales are still higher than 2015, as are prices, and the number of days a property takes to sell after listing is still shrinking – something market watchers see as signs of a brief slowdown, as opposed to a longer cooling trend.
Seventy-six detached homes were sold on the Sunshine Coast in July, down from 105 in June. But the median price edged up slightly, and year-to-date sales and prices are still well above 2015.
The REBGV calls it “a return to more historically normal levels.”
Local realtor Gary Little told Coast Reporter he thinks that’s at least partially accurate, but he points out that sales started to take off in mid-2015, so right now people are comparing two busy years.
“Comparing this summer to last summer, sales were almost the same, at least for detached homes,” he said. “Even though we seem to have slowed down to last July’s numbers, last July was a pretty good month.”
Little notes there is still more demand than supply in the detached home category, which could be one reason that vacant lots continue to see the strongest growth. He also said that, in his opinion, there is plenty of supply to meet that demand.
“Last year there were something like 73 lots sold on the Sunshine Coast. [Already] this year it’s over 250,” he said. “There’s still a couple of hundred vacant lots for sale, so I’m not worried [about supply] yet. I think there’s still a healthy selection.”
The B.C. government is hoping to put the brakes on a seemingly runaway market in Metro Vancouver with an additional 15 per cent property transfer tax on foreign buyers.
Little said he’s not expecting the higher tax on the Lower Mainland will skew the Sunshine Coast market significantly when it comes to detached homes, but there may be some effect on recreational property, in part because the taxed area includes places like Bowen Island.
“Vancouver’s a very desirable place, and prices have gone up for so many years, for foreign investors it seems like an obvious place to put your money into,” he said. “Up here we’re more likely to attract people, Americans for example, who want some recreational property … If they go to the Vancouver area they have to spend an extra 15 per cent. If they want recreational property, this is a very good choice.”
Powell River-Sunshine Coast MLA Nicholas Simons is worried about what might happen if the new tax ends up driving a lot of house hunters from the Lower Mainland to the Sunshine Coast.
“Perhaps that will heat up what I already think is a fairly hot market and have the same negative impact as it’s had in Vancouver in terms of affordability,” he said.
Simons also said another concern with the foreign buyer tax in Metro Vancouver is the possibility that it may kill some deals on the Lower Mainland, where the seller was planning to turn around and buy property on the Sunshine Coast.
Simons is bringing NDP housing critic David Eby to the Sunshine Coast for a town hall on Aug. 29 (7-9 p.m. at the Sechelt Indian Band Hall), and one of the issues that’s sure to come up is the knock-on effect all of this is having on renters.
Little said there isn’t a lot of hard evidence that an unusually large number of rental properties are being sold to people who are taking them out of the rental pool.
But, there is plenty of anecdotal evidence. Facebook groups for people looking for housing are full of stories about needing to move because their rental home is being sold.
One Sechelt business owner recently took the unusual step of using his company’s social media platforms to help him and his family find a new rental. Darcy Perry of Lucky’s Smokehouse told Coast Reporter he, his wife Amy and their 10-year-old daughter Mya were in exactly that situation.
“We were in a rental house and the landlords put it on the market,” he said. “You can’t blame them for doing it – it’s an investment property and they’re there to make money on it. But it put us in a spot where we had to look for a new house, and we knew it was going to be tough.”
He said the house they were in sold in about a week, and they were given until the end of September to move. Perry said the rental market was every bit as tough as they’d thought. There were so many applicants for one home the landlord upped the asking rent from $1,100 a month to $1,600.
Perry did eventually find a suitable place. The rent is about one-and-a-half times higher than what they had been paying, and they were up against more than three dozen other applicants.
He said renters now need to work harder to sell themselves. “You’ve really got to make yourself stand out, and show how serious you are and how good [as tenants] you are.”
Adam Major, managing broker at the rental agency Holywell Properties, said things are tight, especially for rentals at the $1,500 a month or less price point, and added it’s common to see several people competing for properties that are becoming available. Major said it’s typical for more vacancies to pop up in the early fall.
Perry also said he sees the impact of the tight rental market from another angle – that of a business owner and employer – and he thinks it’s starting to have a broader effect on the local economy.
Local governments, meanwhile, are looking for ways to measure how short-term rental options like AirBnB and VRBO are changing the overall rental market.
At their Aug. 3 meeting, Sechelt councillors voted to have district staff draft a report, following up on specific complaints from residents of the Sandy Hook neighbourhood, as well as the wider questions around unsanctioned short-term rentals.
“It is a real issue, and it’s tied into the rental market and affordable housing,” said Mayor Bruce Milne. “Understanding the way AirBnBs and unlicensed rentals fit [into the affordable housing issue] is useful and it’s directly related to homelessness.”
“Sechelt is in a position where it desperately needs some help on this file,” added Coun. Noel Muller.
