Hot real estate market paves way for building boom

Housing

The Sunshine Coast’s construction industry is starting to feel some warmth from the hot real estate market. At the same time, though, fresh concerns are being raised about affordability and supply, as real estate sales and prices continued an unprecedented upward swing in April.

Realtor Gary Little, who’s been publishing detailed real estate statistics for a decade, told Coast Reporter that sales in April (in all classes) were the highest recorded in the 24 years of data he’s collected. “In terms of detached home sales it was the fourth most active month ever,” he said. “The number one month for activity for detached [homes] was March.”

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Little also estimates median prices are up 20 per cent over last year. As of this week the median price for a detached home was $499,500, up from $419,901 in 2015.

“Some buyers are going to be struggling to be able to afford homes on the Coast,” he predicted.

Little said it seems to be an acceleration of the trends he noticed earlier in the year when it comes to who’s buying homes – Lower Mainland residents “cashing out” and moving to the Coast, although there are an increasing number of younger families looking for their first home.

Tony Browton is a realtor specializing in properties in the Gibsons area, and his clients fit a similar profile. He also works on the North Shore, and a lot of buyers he sees are leaving that market and looking to Gibsons and places within a quick drive to the ferry so they can continue working on the Lower Mainland. Browton thinks many have an eye on Gibsons as a bedroom community for the Lower Mainland, with amenities such as a new passenger ferry service, a possible fixed link, and expanding fibre optic networks making a commuter lifestyle more practical.

Little and Browton agree that, for now at least, foreign buyers still aren’t much of a factor on the Sunshine Coast.

“In my opinion it’s not that driving the market,” Browton said. “It’s what people gossip about, and talk about, and they think that, but I’d say most of the market is primarily being driven by people who are being priced out of the North Shore.”

“I hear rumours about foreign buyers coming over to the Coast and having a close look around and buying stuff up,” said Little, adding that no one actually tracks that statistic so it’s impossible to say for sure. “My personal experience is it’s basically people who have lived in the Lower Mainland or other parts of B.C. or Canada.”

Real estate, no matter who’s buying it, follows the law of supply and demand.

“There is no supply right now,” Browton remarked when asked about the supply/demand balance. “The comparison between this year and last year is unbelievable … and that’s what’s really driving up the market.” 

Little notes that May and June are traditionally when more homes go up for sale, so he’s expecting to see an increase in supply, but he’s also expecting it to be matched by strong demand, which could lead to another record month.

The numbers also suggest more of the housing demand is now being filled by new construction. The biggest sales increases in April were for vacant lots. Sales of undeveloped land were up more than 230 per cent from April 2015, and they’re up 189 per cent year-to-date. Sechelt, Gibsons and the Sunshine Coast Regional District have all reported increased building and subdivision activity.

Clark Hamilton has been a homebuilder on the Sunshine Coast since the early ’70s, and is one of the founders of the Coast Community Builders Association, of which he’s past-president and a member of the board.

Hamilton said the amount of new construction happening on the Coast seems to be getting back to the levels of the boom of the early 2000s.

“There’s a lot of building going on, and there’s a lot of people inquiring,” he said.   Hamilton also said that means many builders are looking to hire.

“I always find it difficult to compare,” said Hamilton. “This cycle, what we’re seeing right now, I don’t think we’ve ever experienced on the Coast yet. I think it’s something fairly unique.”

Sechelt Chamber of Commerce President Kim Darwin, a mortgage broker, used much stronger language when she described what she’s seeing in the market at a Chamber event May 5, calling it disconcerting and a potential crisis.

“I can tell you that the last three, four months have been insane,” she said, relating the story of a family whose rental home is being sold by the landlord. “There’s a single income, prices are going up and they can’t find anywhere to rent and they can’t afford to buy. This is what I’m hearing on a daily basis. It’s actually really scary.”

– With files from Christine Wood

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