Surge in international visitors, high-end home sales signal top resort back in the game
Other
On September 7, nearly 5,000 bicyclists representing Canada and 17 other countries pedalled into Whistler at the end of the 122-kilometre GranFondo race from Vancouver.
The end-of-summer event – the largest timed bike race in the world – followed the first international Ironman competition that’s slated to become an annual Whistler competition. These large-scale events give evidence that Western Canada’s top ski resort still has big-time appeal – and potential – three years after the Winter Olympic Games.
Recently the Audain Foundation, founded by Vancouver real estate developer Michael Audain, started construction of the $30 million, 55,000-square-foot Audain Art Museum in Whistler that will open as a tourist and cultural attraction in 2015.
Hotel bookings for June and July were up 15 per cent and 7 per cent, respectively, from a year earlier – the “highest for those months” since Tourism Whistler began tracking overnight visitors decades ago, a spokesperson confirmed.
Local realtors say that is great news for the retail and real estate markets.
Retail
“One American is worth 10 Canadians when it comes to retail spending,” half-joked Drew Meredith, a commercial realtor with Whistler Real Estate Co. Meredith, who is pitching retail leases across Whistler, says the return of summer crowds is a welcome sign.
“We have been down for awhile,” he said, pointing to retail lease rates. While the top village stroll from “the market to the mountain” still demands lease rates between $60 and $120 per square foot, Class B locations are much less expensive – $25 to $35 per square foot – and harder to lease up.
Still, due to the lack of new commercial construction and the fairly low turnover, retail vacancy rates remain a healthy 2 per cent, comparable to top street front retail locations in Vancouver.
Housing
Yet it is residential that has always defined Whistler real estate and there are also signs of a turnaround in a housing market that has been the worst performer in the southern Lower Mainland for most of the last decade. The benchmark price of a detached house in Whistler in August dipped to $900,900, down 1.5 per cent from a year earlier and 9.7 per cent lower than five years ago.
As a comparison, the typical Lower Mainland detached-house price increased 14.6 per cent since 2008, according to the Real Estate Board of Greater Vancouver (REBGV).
This summer, however, an “international businessperson” purchased a Whistler house for $10 million – the most expensive home sale in the resort since 2009.
“I think it’s really a positive sign and it shows there’s confidence in our market,” said Ann Chiasson, owner of Re/Max Sea to Sky Real Estate, who brokered the sale. “I think the real estate market has huge potential here still.”
According to a recent Re/Max report assessing housing trends in several Canadian recreational property markets, international buyers – particularly from Hong Kong and Singapore – now make up 12 per cent of purchasers in the resort.
“Whistler is one of the best places to buy,” said Landcor Data Corp. CEO Rudy Nielsen. “The market is definitely down, but you’re never going to replace Whistler as one of the best places in the world for skiing and recreational use.”
Nielsen believes key factors in the resort’s decline include:
• global economic uncertainty;
• a comparatively high Canadian dollar; and
• tightened lending requirements for buying secondary homes.
Whistler Real Estate Co. president Pat Kelly similarly believes the market is stabilizing. His statistics, based on the larger Whistler Listings Service, show the average home sale so far this year is $1,479,323, or 7.1 per cent less than $1,593,000 in 2012.
Condo prices plunged
“The condo market has taken the biggest drop and this is almost solely attributable to the condo-hotel market, which represents about 10 per cent of the total number of transactions in the marketplace,” said Kelly.
REBGV stats show that the typical Whistler condo price plunged 43 per cent in the past five years to around $212,000 this August.
Phase 2 properties are one quirk of Whistler real estate.
Buyers of these properties get condominiums that are managed by companies such as the Four Seasons Hotels and Resorts. These properties have a covenant and operate in a rental-pool system that limits owners to spending a maximum of 56 days in their properties each year.
Phase 2 properties are desirable because they tend to be close to the village and ski hills. Realtors, however, argue that they are qualitatively a different real estate class than properties in which the owner can live year-round.
According to Chiasson, another factor that skews Whistler real estate price trends is the small total number of sales: high condominium sales or low single-family home sales can magnify and distort trends.
Regional homebuyers still drive the majority of business in Whistler’s housing market, with Re/Max noting that 75 per cent of purchasers are from B.C.
“We’re seeing more people coming from the Lower Mainland and purchasing because it’s more affordable than the city and it’s better than betting on the stock market,” said Whistler realtor Steve Legge. “There’s more trust and confidence in our market.”
Best sales since ’08
The Re/Max report noted that Whistler posted its best first-quarter numbers since 2008 this year. Between May 2012 and April 2013, 565 property sales were made – nearly identical to last year’s levels – with the average transaction price rising slightly from $676,000 to $696,000.
Demand remains high for properties listed between $500,000 and $1 million, the resort’s most popular price point, although the report also indicated strong demand for products priced up to $1.5 million. The average starting price for a typical three-bedroom chalet in Whistler is $700,000.
There are currently 150 houses listed for sale in the resort, starting at $539,000. There are also options for buyers on the lower-end of the spectrum, with 37 properties available under $400,000.
The average Whistler condominium price dropped 12 per cent in the last year, according to the report. Legge says that Whistler’s condo market has “picked up some” in the last year with the reduced pricing.
With interest rates at near-historic lows, Legge, who works with Whistler Real Estate, says that now is a good time for potential homebuyers.
“Truthfully, steady as we go is the feeling I get,” he said. “I’m optimistic we’ll see a slow, steady growth – provided pricing doesn’t get out of control.”
from Western Investor October 2013