By Ozzie Jurock
A lengthy forestry strike, shut downs at major pulp mills and an expected slowdown in Alberta and other offshore buyers may open a window of opportunity for real estate investments on Vancouver Island over the next three or four months.
That is not to say the current market isn't strong.
Multiple Listing Service sales data released by the Vancouver Island Real Estate Board (VIREB) for August shows average sale price across the VIREB region (north of Victoria) was $340,380.
This is a 17 per cent increase from the same month last year, with sales increasing almost 20 per cent.
Board president Jennifer Lynch says unit volumes have been climbing steadily since the early spring. "For the last five months in a row, overall monthly sales volume has increased from the same month in the previous year."
Average sale prices across VIREB's six zones, from August 2006 to the end of August 2007:
With an island-wide forestry strike (with no sign of a settlement as of this writing), union officials are already warning of mortgage foreclosures and homes being put up for sale as younger workers leave the island looking for work.
The United Steel workers strike involves 7,000 workers up and down the B.C. coast.
In Port Alberni, with 1,700 loggers on strike, the Catalyst pulp mill, the largest employer, is on the verge of a complete shutdown.
In Crofton and Campbell River, the Catalyst pulp mills are seeing layoffs due to the forestry strike and to Catalyst cost-cutting.
Meanwhile, buyers from Alberta who have been most active in the Comox area (but still represent only about 10 per cent of Island home sales) are expected to slowdown because of a recent correction in the Edmonton and Calgary housing markets.
Market turmoil linked to the money market may also reduce the influx of Mainland buyers, who represent about 15 per cent of island buyers.
Consider Port Alberni. The town is in the middle of Vancouver Island on the road to the Pacific Rim, with good golfing, fantastic fishing, a large lake, a marina, and ocean access on the Alberni Inlet - making it an ideal recreation destination.
It also has an excellent hospital and other infrastructure, and is a town where another 185 pulp mill workers lost their jobs on Labour Day.
In September, there were at least 103 detached houses for sale for less than $250,000 and 10 priced under $150,000 in Port Alberni.
Listings are rising as the forestry strike drags on.
The long-term outlook for the island is very bullish.
That's why short-term slowdowns that may occur (although they're not really apparent in the numbers yet) may be a good buying opportunity.
Retirees or rec investors looking for a low cost alternative to the Okanagan may find Port Alberni a very good buy this winter.
Published in the Calgary Herald, Oct. 2007
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