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real estate values

Whistler, once again, is the bright blip on the B.C. Assessment radar screen showing an overall increase in the value of residential real estate while the rest of the B.C. property market suffered a general decline.

Whistler, once again, is the bright blip on the B.C. Assessment radar screen showing an overall increase in the value of residential real estate while the rest of the B.C. property market suffered a general decline.

Whistler properties on this year’s assessment roll have generally increased up to 10 per cent but the higher-end properties — those priced over $1 million — showed an even greater jump: 18-30 per cent.

That, said realtor Pat Kelly, is consistent with a market driven by a global economy, as opposed to the B.C economy, and he expects the trend in increasing prices to continue.

Kelly, president and owner of Whistler Real Estate, said in the short term it is the ‘resort’ properties that will increase significantly in value. He said luxury real estate close to amenities like the ski lifts, a golf course, a lake or close to the village will be fuelled by the international economy.

“There will be a very international resort buyer for that type of product but, in the Emeralds and Alpines of the world, that would be a more regional purchase and, in the short term, you would need to be a little bit more precise in terms of how you price your property if you want to sell it,” he said.

“In the long run, however, if the very wealthy can’t get the house right next to the ski runs, they will start looking at Alpine and White Gold and Whistler Cay and think of tearing down an ‘old shack’ and putting something else up.”

In terms of the assessment role, market movement is pegged at July 1, 1999. The B.C. Assessment authority takes an historical look at average real estate values attained until July last year and weighs them up against the previous year.

The market movement varies between provincial jurisdictions and neighbourhoods but, overall, B.C. Assessment reports there has been a decline in residential property values across B.C. between July 1, 1998 and July 1, 1999. Some communities affected by falling international resource prices are seeing a significant drop, while areas driven by tourism and lifestyle markets are less affected.

Area assessor Calvin Smyth said the higher priced Whistler properties in areas like Sunridge, Blueberry Hill, Nicklaus North and Horstman Estates, have increased up to 30 per cent while areas like Alpine saw a smaller two to three per cent increase.

Condominiums on this year’s assessment role are also generally valued higher than the previous year. The anomaly this time around, however, is Emerald Estates. While the resort saw an overall 10 per cent increase in values Emerald properties dipped an average 5.8 per cent. Area assessors say Emerald usually parallels the increase in Alpine but attribute this year’s drop to considerable publicity regarding the capital cost of the sewer hook-up. Assessors say they have heard the cost of sewer linkup could cost homeowners between $15,000 and $20,000 and this is the reason the market has dropped. This is the first time they have seen a drop in value outside the Whistler norm.

Kelly said inventory, especially in the high-end, is becoming more scarce and that is helping drive prices upwards.

“In January 1999 approximately 5.5 per cent of all properties in Whistler were available for sale. Now it’s at about three per cent, so you are seeing a significant drop in the amount of property available for sale which should indicate a fairly strong interest in the area,” said Kelly. “We are selling stuff faster than we are putting it on the market. The only market that is showing more supply than there is interest is the condo hotel market.”

Right now, it is the wealthy baby boomers and Americans driving the high-end sector, more so than Europeans or Asians. Kelly said the U.S interest is due to a combination of factors.

“The American  economy is strong. There have been huge profits made in the stock market and that money is being redirected into other investments. It’s the weak Canadian dollar for sure and it is the quality of the amenity package offered here.”

He said the U.S demographic trend to move away from cities and into small “highly controlled and safe towns” is finally spilling over into Canada. Those small towns must, however, offer a healthy amenity package, have a lot of open space, communications capability and they need access to major population centres and transportation routes.

“Resort towns are the top of the list of where people want to be and, Whistler is one of the top resort towns, plus we are cheap vis a vis other American experiences,” said Kelly.

“For example I had a buyer from San Francisco last weekend and for him $2 million wasn’t even a question. He said it was easier for him to get here than to get to Tahoe and as far as he is concerned, Tahoe is overbuilt.”

Kelly said traditionally 75 per cent of buyers came from Vancouver but Whistler is now out of step with the rest of the country. “Vancouver people get a little shocked when they see our prices but they try to compare us to their home in North Van instead of comparing us to Tahoe and Vail or Aspen or other resort towns.”

Kelly said it will be interesting to see how Intrawest’s new Taluswood Heights sells, which is due to come on the market in about a month.

“It’s a resort, ski-in ski-out type of project. It won’t be cheap and if it sells I think it is even a stronger indication of where our market is coming from more and more.” Kelly said this trend will put pressure on Intrawest to concentrate on that market segment.

He said even if the American market were to collapse the future is rosy. Asia could be making a comeback and there is always Europe. “One huge market we have not seen much of yet is Mexico or South America, and they traditionally go to Park City or Vail. We saw some interest from there last spring,” said Kelly.

“We will increasingly be a chosen destination for the international affluent.”

As well, Whistler has limited supply in terms of its development cap. “There is a reason property doesn’t go up in Palm Springs. Every time there is an upswing in demand somebody opens up 500 more acres. We have a fixed supply. Short of a major economic collapse or it raining for 12 months, people are going to look at this area as a choice and, as long as it presents good value, people are going to come here and that is just going to drive prices up.”