Western Canadian investors
find refuge in recreation property
An uncertain U.S. stock market and a wobbly world economy may prompt savvy investors to ultimately move their cash into Canadian bricks and mortar, says a Calgary economist who also forecasts recovery in the west in as little as six months.
“If I had some extra cash, I’d be putting it into real estate,” says Frank Atkins, associate professor of economics at the University of Calgary . Atkins blames the U.S.-based media outlets for a negative impact on consumer confidence in regions like western Canada where there the facts are more positive, but the fear is higher than necessary.
“In Canada we are in a much better position, in spite of what economists are saying south of the border,” says Atkins.
“It is only going to be a temporary thing. In the next six months to a year I estimate the price of oil will be $98 US per barrel. What is keeping it down is uncertainty and negative media. I would bet you a loonie the US economy is not quite as bad as the ‘doomers and gloomers’ would have you believe,” says Atkins.
Meanwhile, real estate remains a solid choice for longer term investors, says Kelowna-based housing market analyst Paul Fabri of Canada Mortgage and Housing Corporation.
“There is a glass half full side to this because the medium to long term outlook for price gains on recreation property is good. We have an aging population ultimately looking for recreation properties - that’s a key factor. And as we begin to see stronger economic growth that’s predicted in the mid- to long-term, the outlook for that market is quite strong.”
Also, lakeside tends to be the safest bet for holding or seeing appreciated value, adds Fabri, as supply rarely improves.
“There’s no doubt lakeside is the crème de la crème of resort properties,” he says.
Buyers who might be waiting for prices to come down should know that raw land values on waterfront have remained firm, he adds.
“It’s by far the strongest performer because it’s a limited resource, and seems to never be over built because projects seem to come on stream slowly,” he says, adding availability of waterfront probably won’t get better due to banks’ tighter loan policies. Lack of financing for new construction has forced a delay on some approved projects which won’t break ground for a few years yet, he said, adding those waterfront projects which are already underway will be uniquely placed as a rare option in the marketplace.
One example is Legacy on Mara Lake , by Sable Resorts, which is well-positioned and on pace for completion. “We are on track with our budget and ahead of schedule with strong site management and quality of trades,” says Sam Boguslavsky, President of Sable. This month completing the roof, and sealing the building envelope, the company will bring on finishing crews to install cabinets into dry walled units on lower floors. First possessions are scheduled in May 2009.
“When our first families take possession and begin to create their own memories and legacies, nothing else of this quality and value will be available on Mara Lake or the Shuswap,” he says, explaining the name Legacy was chosen to articulate the company’s goal to create properties for their buyers which will become an appreciating asset.
“In terms of an investment with high potential for increasing value, this is truly an example of an irreplaceable Western Canada gem built on the fundamentals of unique architectural design, an incredible waterfront location, and long-lasting integrity of construction,” he says.
Legacy on Mara Lake offers units from $369,000 to $1.65 million plus GST, situated on the Okanagan’s famed network of lakes in the Shuswap with more than 1,000 km of shoreline. Minutes from Sicamous , BC and about one hour from Kelowna International Airport , the area is known for year-round recreation which includes boating, world-class golf courses, protected natural lands in provincial parks, fruit orchards, wineries, and ski resorts.
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