Tag Archives: Luxury Real Estate

Market Analysis, October 2018, Salt Spring Island

October 2018, Salt Spring

Ganges Harbour

Ganges Harbour

We are now well into Fall…all the Harvest events, Farmers Markets, farmgate stands are busy inviting us to enjoy this fruition time.

Early Fall is a mix of rainy days, sunny days with almost summer warmth in afternoons, darker mornings and evenings as the days shorten…plus crisp evenings perfect for star watching. And yes, that is Orion, the Hunter constellation, creeping up the sky…the herald of Winter.

The Fall Market in real estate on Salt Spring and the Southern Gulf Islands can be busy. Buyers may have come in late Spring/Summer to “look”, but they often wait till Fall to offer.

People looking at properties on Salt Spring, right now, are seeking permanent homes…they are not, in the main, looking for recreational options.

That’s actually a change. In previous years (up to the economic meltdowns of late 2008), we saw many Albertans & U.S. buyers on Salt Spring and the Southern Gulf Islands. These were recreational buyers…this was not their primary residence.

Post-recovery (mid 2016), the main buyer profile became a Vancouver buyer…who had sold in their venue for large dollars. They were seeking a destination to move to…they were not recreational buyers.

So….in seeking that “forever” destination, Salt Spring garnered competition: Sooke/Metchosin, South Cowichan, Courtenay/Comox…hmm…why your area? Why not theirs? Good question!

Islands Trust

On Salt Spring, which is a part of the provincial government mandated Islands Trust (in place since 1974), one understands that development is “capped”. What you buy is what you get. There will not be myriad new subdivisions opening up. A cap on growth also delivers (over time) an increase in valuations: low supply & generally high buyer demand does, in the end, result in price escalation.

Salt Spring offers a hospital, great ferry connections (three ferries with year-round schedules: one to Vancouver, one to Victoria, & one to mid-Vancouver Island), year-round regular sked floatplane services (to Vancouver Airport, to downtown Vancouver, to Seattle, to Maple Bay on Vancouver Island), 3 elementary, a Middle School, a state of the art Senior School, plus indoor pool, plus Arts Centre (ArtSpring), plus alternative health opportunities, plus a strong artistic/cultural base, and…the list goes on. Salt Spring is an eclectic and vibrant Island, with a year round lifestyle.

The real estate market on a Gulf Island, including on Salt Spring Island, is always dependent on outcomes in the areas that generate the buyers. Since mid-2016, that has been a Vancouver buyer.

The current provincial government has purposefully been making taxation decisions that will suppress a real estate market. Their intention was to cool the market in Vancouver, and also in Victoria, Nanaimo, Kelowna. Their measures have worked…sales have softened in Vancouver. As a recipient market, dependent on non-local buyers, Salt Spring may feel the effect of this suppression. It may take longer to achieve a sale and prices may reduce.

Kinder, Gentler Lifestyle

That said, there is a huge desire for Vancouver residents to leave the city and Salt Spring is one of the locations they consider. Perhaps the Vancouver potentials will simply end up accepting the prohibitive tax measures in their area, and decide to just get on with things. That strong desire to live a kinder, gentler lifestyle may continue to uphold the Salt Spring and Gulf Islands markets.

At this moment in time, early October, listing inventory remains thin and buyer desire remains high. Over half of the Salt Spring listings are priced over one million. A very thin residential inventory available below 900,000. Hmmm…. To remain in the entry level pricing category, a buyer might be best served by purchasing undeveloped land and building a cottage or studio. It is a struggle to find a residential property, below 750,000, that does not need serious renovation work.

Meantime, in this era of consistent and constant change, it is a gift to visit Salt Spring and the Gulf Islands…to experience a lifestyle rooted in 1974 (the year the Islands Trust was created, by the provincial government). If one can also consider living here, one immediately understands that all the necessities of a 21st Century experience are available…though wrapped in the charm of 1974. Fall is a superb season to discover the Gulf Islands.

Market Analysis, August 2018, Salt Spring Island

August 2018, Salt Spring

The Mid-way Point

The first of August reminds us all that summer-summer is at the mid-way point.

Salt Spring Island

Salt Spring Island

Well, for those with school-age children that’s certainly the case…summer is over with the back-to-school ads.

The calendar, though, says summer ends on September 20th.

The real estate market on Salt Spring and the Southern Gulf Islands became a summer/fall market, some years back. Many sales take place between August and December. So…for real estate, summer and fall remain busy.

Sellers who panic when July folds into August need to remember that the main business on Salt Spring is just ramping up.

And what about that business? Thin inventory in any property type below one million is a fact. Prices have stabilized. There are both small bidding wars and back-up offers.

Although the market segment between one and three million is a slower paced sales pattern, that more affluent buyer also tends to turn up from August on. There is also a growing interest in estate style properties between 2 and 5 million (Canadian Dollars).

No matter the property type or the price point, the inventory is the thinnest I can remember, since 2003.

Salt Spring Islands Trust

Salt Spring is governed by the Islands Trust. This provincial body was formed in 1974, with the mandate “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. This cap on growth maintains a pleasing and community based lifestyle. A “yesteryear” experience coupled with everything required for a 21st Century life…a winning combination. It’s also a reminder of Economics 101: low supply coupled with high buyer demand create price increases.

Sellers and realtors do not create markets…buyers do that. The Gulf Islands were in an almost nine year downturn (late October, 2008 to mid-2016), as a result of the economic meltdowns of late 2008. Buyers vanished in those downturn years, and sellers lingered on the market…price reductions did not generate action. That was the classic buyer’s market (lots of listings and no buyers).

Now, we are in the classic seller’s market in the recreational/secondary home marketplace of the Gulf Islands: low inventory and lots of buyers. During the slow recovery of mid 2016 to late 2017, there was a sales volume increase in that entry level residential segment.

At the moment, as we start into August, most buyers are seeking residential options between 650,000 and 1.3 million. In waterfronts, we are seeing interest between one and three million. With the main part of our sales window still before us, there is an expectation that we may be looking towards significant price increases by 2019. If so, it will be based on continuing lack of inventory and the continuing return of buyer interest.

Government-Induced “Pauses”

There have been many government-induced “pauses” during the current slow market recovery. It is true that in all areas, city or rural, there is a lack of affordable housing and/or work rental options. Salt Spring struggles with this, too.

The current provincial government has turned to taxing an owner’s asset (their primary or secondary home) via severe taxation measures, in an attempt to create both affordable homes and a rental stock….this does not alleviate the problem. It may actually make things worse.

Vancouver is experiencing these taxation measures and the Lower Mainland market outcomes do affect the Gulf Islands. (The Gulf Islands are exempt from the vacancy tax, because they are part of the Islands Trust).

Yes, in 1974 the then provincial government capped growth on every Gulf Island…now, in 2018, we see the outcome of this 1974 decision…never a lot of listings and varying buyer desire patterns…it keeps choices lower and prices higher. In 2017, Salt Springers voted (63%) to retain the Trust, without change, as the form of governance.

Where do these buyers for the Gulf Islands come from? In the early 2000s, we saw a lot of buyers from Alberta and the U.S. After the economic crash of late 2008, this buyer profile disappeared.

The recovery that slowly began in 2016 was driven by Vancouver sellers. The Vancouver area still supplies most of the buyers on Salt Spring. This is why we pay attention to the real estate rhythms of Vancouver…those sellers have become our buyers. Any market cooling there will affect sales here.

Any questions about the changes to the Real Estate Services Act of B.C., which came into being on June 15? Call me.

Market Analysis, March 2018, Salt Spring Island

March 2018, Salt Spring

Salt Spring Island

Salt Spring Island

March…it brings with it “real Spring” (the one marked on the calendar), plus is the beginning of our main grid of sales activity.

Beginning of the Canadian Market Season

March Break to the Canadian Thanksgiving Weekend (mid-October) signals our “season” in our secondary home/discretionary/recreational region.

The busiest months are July, August, September, of course, and these months also encompass high tourist season, but holiday weekends in earlier months, and school holidays (March Break), begin the rhythms.

March is beginning with very little inventory for sale. High buyer demand (in the entry level residential segment) continued throughout January/February, in spite of weather hesitations. There may be some few new listings yet to come onstream, but there is much less choice for a buyer.

The definition of a buyer’s market: lots of listings and very few buyers. A seller’s market? Few listings and many buyers. This scenario often leads to higher list and sale prices.

Sellers and listing agents do not set markets. Buyers do that. Strong buyer demand and few purchase choices create rising values. The economic maxim of supply and demand is a real one.

There are always opportunities for a buyer in a seller’s market. If interested in a property, though, one must be prepared to act. Bidding wars are rare on a Gulf Island…but back-up offers do come into play.

How will new tax affect real estate market?

The new coalition provincial government raised the offshore purchase tax to 20%, at their February budget. It still applies to metro-Vancouver, but now will also apply to Victoria, to Nanaimo, and to Kelowna. For Salt Spring, many buyers are from Vancouver and the Lower Mainland. Will the tax create a hesitation in sales there, as the initial tax did in August, 2016? Those sellers in Vancouver have become many of our Island buyers.

The provincial government is stating that they are bringing in empty home taxes, in an effort to stop speculation…in their words: to stop people treating the housing market as a stock market. They tie this to the affordable housing crunch, which is a feature of all communities, but this also involves the B.C. Tenancy Act (many people choose not to rent their homes).

I write these market updates at the beginning of each month, and do updates via my blog, as the month proceeds. Check out my blog for March 1st. It gives the Vancouver Real Estate Board’s recap of the February Budget. There is some confusion right now, but the offshore purchase tax (at the moment) only applies to Vancouver, Victoria, Nanaimo, Kelowna.

Changes to the Real Estate Services Act of B.C.

Changes to the Real Estate Services Act of B.C. were meant to take place by March 15th. The government wasn’t ready with courses for realtors, or with new contract forms paperwork, for the proposed substantive changes. The date has now been set for June 15th. Until then, it’s business as usual.

2018 seems to be a time of change. For Salt Spring and the Southern Gulf Islands, locked into a form of governance from 1974 (Islands Trust), we might appear to be a time tunnel, but these beautiful islands are on the doorstep of major centres (Vancouver, Victoria, Seattle), and being slightly “apart” does not mean isolation.

It is now stated that all knowledge we possess right this minute will be replaced within 18 months. Hmmm…. The creative response of the artist may be needed more than ever.

Meantime, technological shifts are streaking right along, in our post-Internet world: crypto currencies, block chain investing, 3-D printers, robotics, artificial intelligence (will those machines out-think us?), driverless cars, smart homes, smart phones, online lives, meshed reality…. Hmmm….

1974 is beginning to sound pretty good? It still exists on the Gulf Islands…thanks to the Islands Trust. One can always go out to visit and sample the “always on” world and then come back home to your chosen island.

Are you seeking a Salt Spring Island or Gulf Islands property? Call me. Your best interests are my motivation. Benefit from my knowledge, expertise, and negotiation skills.

Salt Spring offers an authentic artists community, a temperate climate that sustains vineyards, olive groves, small holding farming, plus encourages appreciation of the preserved natural beauty. “Discover Yourself Here” is the tag line of the local Chamber…and it’s true.

Market Analysis, November 2017, Salt Spring Island

November 2017, Salt Spring

Salt Spring Island, November, 2017, Salt Spring

Salt Spring Island

There’s a total of 170 listed properties (November 2017, Salt Spring) at this moment (counting only residential of all types & undeveloped residentially zoned land of all types…not including commercial or industrial zoned listings).

In a “slow/downturn” market, there can be between 380 to 420 listings (residential and undeveloped lots/acreages).

The listing inventory, since mid-March 2016 to current date, has thinned out. Mid-March 2016 was the very first sign of a small recovery on Salt Spring, after the long 8 year downturn.

It was a very slow sales volume increase, however, between then & now, with several non-market driven “pauses”.

The 15% offshore tax in early August, 2016, for metro-Vancouver, for example, also completely stopped the secondary home regions recovery…those Vancouver sellers had become the buyers on Sunshine Coast, on Vancouver Island, and on Salt Spring Island. On Salt Spring, Aug/Sept/Oct, of 2016, were “lost”.

Then: “real winter” (between Dec 3 & May 15) struck: all over the Coast. Both tourism & real estate viewings on Salt Spring were dramatically slowed.

Almost a 9 month pause, then, between August 2016 & May 2017.

The Summer Market was 6 weeks late…it usually starts in last week of June, & did not kick in until July 15, 2017. There were pauses within the summer season, as well…due to smoke from both Interior & Washington State fires…again, affected the whole Coast, but also caused significant delays in Salt Spring activity.

That 6 weeks later scenario seemed to carry into the Fall Market, too. Perhaps October was really September!

August 2017 may also have seen a hesitation in activity due to the incorporation vote on Sept 9th…several people, on either side of the question, were waiting for the vote outcome. There was a lot of off island media coverage leading up to the vote. It may have caused a bit of a “digestion” pause throughout September. Difficult to track these kinds of hesitations.

All these fits and starts sales rhythms aside, the main sales on Salt Spring Island remain below 850,000.

November 2017, Salt Spring

To date, the sales are as follows, from January 1, 2017 to October 31, 2017:

  • 21 sales between 95,000 & 199,500.
  • 25 sales between 200,000 & 299,000.
  • 31 sales between 305,000 & 396,000.
  • 43 sales between 400,000 & 489,000.
  • 30 sales between 500,000 & 599,000.
  • 20 sales between 605,000 & 690,000.
  • 16 sales between 700,000 & 795,000.
  • 12 sales between 800,000 & 899,000.
  • 6 sales between 900,000 & 950,000.
  • 25 sales between Private Island Estate.
  • 4 sales between 2.2 and 2.5.

The sales between one & two million were either waterfronts (both ocean & lake) houses, or very large farms (20 to 104 acres), or large ocean view acreages/houses. The majority of them were waterfronts.

The sales over two million were waterfronts (3 ocean & one lake), with houses.

These sale price ranges in November 2017, Salt Spring, do not include price reductions…they are the completed sale price points. In some cases, in the over a million category, there were substantial reductions at the point of a sale.

What is the main buyer profile around Salt Spring Island?

The main buyer profile is still out of Vancouver/Lower Mainland. Alberta & U.S. (used to be 50% of our buyers) are still not in evidence. A smattering appear from Ontario, U.K., Europe…but they do not always focus on Salt Spring as a final destination choice. Most Vancouver buyers are seeking to buy down, if they have achieved a good sale price at their end.

It takes time to sell any property in all the secondary home markets, and this is true of Salt Spring, too. The first step is to choose “for” the Island…and then to choose for a property. It usually takes 2 visits (often 3), before a buyer acts on a specific property.

A showings pattern is about the buyer…not about sellers, or properties, or realtors. It just takes the time it takes. Time is a very significant element in every secondary home market transaction.

Properties still remain on the market here for lengthy timeframes, before capturing a sale. Price can sometimes be an allure factor…though not always.

So…here we are…in the closing weeks of a calendar year. Low inventory in all property types and prices. Sellers often achieving list price or close to it. Back up offers in place, if not small bidding wars. A sense that 2018 will see the beginning of serious price escalation, based on that thin inventory/buyer demand scenario.

Hmmm…it does appear that in November 2017, Salt Spring and the Southern Gulf Islands have returned to the buoyant times between 2002 and 2005. A nine year downturn now being followed by a nine year uptick? Stay tuned.

Market Analysis, July 2017, Salt Spring Island

July 2017

July begins our main season…both for tourism/visitor experiences and for real estate discoveries and sales.

In a way, Salt Spring Island is seasonless. People turn up at any time, and real estate sales occur in December and January as well as in August and September.

Salt Spring Island

Salt Spring Island


The Pacific Northwest Coast, though, does seem to call forth most activity and arrivals in the late summer/early fall time. Although gardens spill over into spring beauty in April/May/early June, the arrivals time for serious property seekers has evolved into that mid-July to end of October timeline.

Since mid-March, 2016, and even with interruptions from city off-shore tax ramifications and results of “real winter” (added up to 7 months of “pause”), we began to recover from that 8 year global economic downturn…and we have now arrived at an authentic seller’s market.

The classic definition of a seller’s market: low inventory plus high buyer demand. The outcome of a seller’s market: price increases.

That said, there are always opportunities for a buyer.

To own property on a Gulf Island, including on Salt Spring Island, is a long-term and enviable asset.

In 1974, the provincial government created the Islands Trust. It’s mandate: to preserve & protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. Through strict zoning/bylaws, the Trust effectively capped growth.

A limited inventory, both structurally and by market forces, does predict an escalation of prices, over time.

These early days of recovery in the real estate sector have seen most of the sales activity in the entry level priced properties. It may be that this action will now start to be seen in the mid-range to the upper tier priced options. What is also interesting, at this point: undeveloped land options have also seen sales action. A market recovery does always begin with sales in the entry level residential segment. As inventory thins, land options and a building project are considered.

July and August are key months for all businesses in our rural/recreational region…tourism is the main industry in the Gulf Islands. A successful visitor experience can result in a real estate sale.

Looking to sell? This may be an optimum time to consider listing your property. Low inventory coupled with buyer demand does favour a seller. Prices have stabilized. In many cases, properties are selling at list prices. In a few instances, if a property is unique and there are no comparables, there are small bidding wars. There are often back-up offers, due to lack of supply. That said, the buyers are, in the main, not “local”. They are looking in other coastal communities, too. Salt Spring has competition as a destination for a buyer. All sellers need to treat offers with respect. The Gulf Islands are discretionary/”by choice” areas.

Seeking to buy? A creative approach can often keep a property purchase at budget. It’s important, though, in an offer moment, that one puts in one’s “highest & best” offer response. A seller’s market means that the negotiating window that buyers enjoyed, two years ago, has been erased. There is competition from other buyers now. More information, on how to enjoy a successful property purchase, as a buyer? Call me!

There is always opportunity, regardless of a market trend in play at any specific time.

Market Analysis, April 2017, Salt Spring Island

Salt Spring Island

Salt Spring Island

April 2017

We experienced the yin and yang of a La Niña weather pattern on the Pacific Northwest Coast…from early December to mid-March.

Salt Spring fell into “real winter” on December 3, 2016 and experienced yet another serious snowfall on March 5, 2017. In between: snow, cold, with ice build-up remaining on roads between the frequent snow storms, only main roads to ferries cleared (side roads and driveways on their own). There was skating on the lakes…that was a fun item. The last time the Coast experienced the La Niña effect was in 1996.

The entire Coast was affected, including Vancouver. The weather did affect real estate viewings…potential buyers couldn’t get out of where they were, never mind not being able to easily get around on Salt Spring!

December, January, February, and first half of March (higher elevation properties only saw the “melt” begin around March 12th) caused a slowdown in new action. Many of the reported sales of early 2017 had their beginnings in late Fall of 2016.

Although we often describe Salt Spring and the Gulf Islands main sales window as falling between March Break and the Canadian Thanksgiving Weekend, the reality is that the busiest months are May, July, August, September.

The Islands are secondary home/discretionary/recreational markets…I call them recipient markets. Sellers have to wait for a buyer to first visit, then decide if a particular island works for them, and then to really start their search for a specific property. Time is always an element of sales in all secondary home/recreational regions.

That said, it’s clear that 2016 was a sales volume increase year…a cleaning out of inventory that had built up during the eight year economic downturn. Prices stabilized, but did not increase.

In a “by choice” area, such as Salt Spring (and the Gulf Islands), there is always a time lag component in sales outcomes.

Salt Spring Island

Salt Spring Island

Often, a tourist with a successful visitor experience becomes a buyer in our region. Usually two, if not three, visits take place before a purchase decision. The non-local buyer wants to “be sure”, before committing to a purchase. When a property sells quickly, it often means that a property is listed exactly when a buyer has returned for that second or third decision-making visit.

With less inventory to choose from, however, we may now start to experience some bidding wars, IF a property is unique.

2017 has had a slow start, solely due to the unusual weather vagaries, but all signs are there for further inventory clean-out (especially in the upper tier priced residential properties and in the undeveloped land segment). After that? No crystal ball, but the signs are definitely in place for price increases in any new (and potentially few) new listings.

The tone of 2017 may be fully in place by late May. It may be that buyers who acted in the first three months of this year will turn out to have been the last buyers able to catch a seller’s interest with a lower than list price offer. In other coastal regions, which often catch the wave of change before it’s seen on Salt Spring and the Gulf Islands, the price escalation due to lack of inventory is in evidence.

Between 2000 and 2002, sales volume increased by around 50%. Between 2003 and 2005, prices rose by around 60%. Our dollar was low against the U.S. currency. International buyers were in evidence. Hmmmm…… Similar soundtrack?

Stay tuned.

To date, there have been 55 sales between January 1 and March 31. The first several (below 200,000) were undeveloped lots. The higher end residential did see price reductions at the point of an offer, but residential below 500,000 often sold at (or close to) list pricings.

  • 6 sales between $160,000 and $199,500.
  • 4 sales between $234,000 and $280,000.
  • 8 sales between $305,000 and $396,000.
  • 8 sales between $400,000 and $485,000.
  • 9 sales between $506,200 and $599,000.
  • 5 sales between $625,000 and $690,000.
  • 3 sales between $729,000 and $769,000.
  • 3 sales between $800,000 and $878,000.
  • 2 sales between $900,000 and $945,250.
  • 4 sales between $1,075,000 and $1,750,000.
  • 3 sales between $2,200,000 and $2,500,000.

I do this market analysis at the beginning of each month…updates may appear in my blog entries.

Along with the transition from a buyer’s market (few buyers and many listings) to a seller’s market (few listings and many buyers), there is the Islands Trust (government body in place since 1974, which capped growth on the Gulf Islands via strict zoning/land use bylaws)…the inventory will always be less on a Gulf Island, thus, beyond market trends).

Salt Spring will be asked on September 9th whether or not to retain the status quo (2 elected trustees and one elected CRD director…the actual decisions, however, are currently made from a central Trust office in Victoria…and these government appointees do not reside on Salt Spring), or whether to incorporate as a Gulf Islands municipality (two trustees elected, per usual, plus councillors & a mayor…the Trust documents remain in place, but decisions re governance would be made on Island & not in Victoria). Keep in the loop of the conversation on both sides of this important issue.

Meantime…the beauty of the Island calls to us. Check out the Food Network’s one hour showcase of Salt Spring…the travelling chefs came last summer and I think they caught the essence of this magical island.

Looking for your special property on Salt Spring Island or on a Gulf Island? Call me. There is always opportunity for a buyer, regardless of market trend in play.