December 2018, Salt Spring
Here we are, starting into the last month of this haphazard 2018 market year.
The weeks between January 1 and February 20 did promise continuing brisk real estate sales…inventory was diminishing in residential offerings and prices had solidified…undeveloped lots/acreages were catching interest…higher end properties were being shown…and a seller’s market was in play.
Provincial Government Policies
The coalition provincial government brought in a budget (February 20) that specifically targeted Vancouver, Victoria, Nanaimo, and Kelowna…seeking to suppress the buoyant real estate markets in these areas. Several measures were introduced…the speculation (vacancy) tax being a key one.
Between February 20 and March 27, the Southern Gulf Islands/Salt Spring Island were included in the vacancy tax. The government used regional district boundaries to delineate where this tax would be applied. The government agreed that the Islands Trust (formed in 1974) had created a recreational ownership-resort based region and so all Gulf Islands were finally excluded.
Since the slow recovery on Salt Spring (began in mid-March 2016), inventory in place, due to the economic meltdowns of late 2008, had slowly cleared out. Fall 2017 & up to late February 2018 saw consistent sales and in all price ranges. Then the February 20 budget…..
Were the policies effective?
The point of the taxation measures applied to Vancouver was to suppress the real estate market…the theory being that prices would drop and affordability would rise. It might have been a better idea to open up opportunities for construction of affordable rental and purchase units. Sales did shut down in Vancouver, but affordability may not have been addressed.
Salt Spring, like other secondary home markets, is dependent on buyers from elsewhere. The recovery on Salt Spring, after the almost nine-year economic meltdown, was driven by Vancouver people who had sold in Vancouver…and were looking to relocate. The suppression in the Vancouver marketplace, after February 20, caused a corresponding pause in action on Salt Spring, for most of 2018.
Inventory still remains low. During spring/summer there were viewings. Fall saw more sales…not just showings. Sales were mainly below 800,000, and residential, not lots/acreages.
Visiting Salt Spring Island is the Key
Some projections are calling for a bounce back in the Vancouver marketplace by early spring, 2019. This is an unknown. What is known is that Salt Spring and the Gulf Islands are dependent on a buyer from elsewhere.
Before the economic downturn, the main buyers were from Alberta and the U.S. The 2016 beginnings of a recovery on the Islands came out of Vancouver. There may be an upcoming reappearance of Ontario buyers, looking for retirement destinations.
To Preserve & Protect
Although Salt Spring and the Southern Gulf Islands are beneficiaries of the Islands Trust’s mandate of “to preserve and protect”, which controlled growth through strict zoning/density bylaws, the Islands are not unaffected by changes and stresses globally. The Islands are affected also by the current provincial government’s various measures to suppress real estate markets elsewhere in B.C. Pauses in market cycles, no matter the cause, are always a feature…it’s never a straight line up or down.
Lack of inventory, however, seems to imply a buoyancy beneath these many government restrictive measures. Those measures, designed to suppress a real estate market, may be being digested. In the end, consumers set the pace. The guru projection advisors may be right about a resurgence in the Vancouver market, by early 2019. Hmmm….
So…at beginning of December, there were approximately 296 sales on Salt Spring, which can be broken down as follows:
Some Sales Data
- 11 sales between 138,000 & 195,000
- 14 sales between 207,000 & 290,000
- 11 sales between 320,000 & 398,000
- 22 sales between 405,000 & 492,500
- 28 sales between 500,000 & 595,000
- 24 sales between 600,000 & 686,000
- 25 sales between 705,000 & 795,000
- 18 sales between 800,000 & 898,000
- 13 sales between 900,000 & 999,000
- 25 sales between 1,005,000 & 1,950,000
- 4 sales between 2,025,000 & 2,850,000
The above numbers relate to the sale figures…they do not show the tracking down of pricings, on the way to that sale figure. For example, a property selling at 730,000 was listed at 774,000. One listed at 2.8 sold for 2.383. Price reductions at the point of an offer can be quite common on listings over 800,000.
Over half the current listings (approximately 106 residential listings, between 309,900 & 4.8, and approximately 57 lots/acreages between 159,000 & 2.495) are priced over a million, if in the residential category. (In a “normal market”, listings might run between 380,000 & 425,000, in total). Listings are not plentiful right now…particularly if below 800,000.
If the water moratorium (put in place by 3 volunteers on the North Salt Spring Water District board) could be resolved, then 255 units (approved and funded), re affordable housing/work rental, could be built.
Those business enterprises that cannot find housing for proposed staff are also recognizing that vacation rentals are required. The visitors staying at airb&b are the buyers of their local products. Both types of rentals are needed in a secondary home/discretionary area, reliant on a tourist based economy.
Last Fall, the current provincial government canceled the fixed tenancy option on a lease, under B.C.’s Tenancy Act. In areas such as Salt Spring, this might be a reason for the reluctance to engage in a regular rental process.
The provincial government is in charge of Improvement Districts (water is under this jurisdiction). The government has transferred Improvement Districts to municipalities. Salt Spring is not a municipality. The CRD (Capital Regional District) would have to assume the Salt Spring water districts…or the unfortunate moratorium will not be resolved. There is no water shortage on Salt Spring. The issue is one of capture & distribution. The 255 ready to build affordable housing/work rental units await the outcome.
The changes to the Real Estate Services Act of B.C., enacted on June 15, 2018, are in place. Questions? Call me.
December is a traditional time of celebrations. On Salt Spring there are many craft fairs (Beaver Point and Fulford Hall craft fairs, WinterCraft at Mahon Hall, pop-up events), plus ArtSpring presents seasonal music and theatre to enjoy. Volunteers create the Shop Local events clustered under the Christmas on Salt Spring label. Santa arrives twice: once by floatplane and later via a Carol Ship. The Village sparkles with Light Up. Lots to see and to enjoy.
Be re-inspired by your personal traditions…take time to remember others…take advantage of the fallow field moment of calm. That’s where the creativity lives.