Shifts in where British Columbians want to live, work and play have recently meant that real estate listings in many areas have been at historic low volumes. While building up more residential property inventory, B.C. developers are working hard to meet the demand for new homes. Here are new development projects to watch and some real estate trends to expect in 2022.
By Kate Robertson
Even pre-pandemic, people were moving to smaller B.C. communities. More affordable places, with less crowding and a small-city feel, but big-city amenities and abundant outdoor activities, have become particularly appealing. For these reasons, regions like the Okanagan, Comox Valley and Kootenays are just a few B.C. communities continuing to grow in 2022.
The BC Real Estate Association predicts that as buyers compete for space outside of the Greater Vancouver area, Fraser Valley prices will increase more than 20 per cent over the next year. Chilliwack’s Van Maren Construction Group expects a continued migration from the western Fraser Valley towards the eastern part where homes are still less expensive. “Our projects are designed to appeal to those who want a somewhat larger home for less than they would be able to obtain in the Lower Mainland,” says Eric Van Maren, co-managing partner.
Many urban homeowners are still considering listing their homes to right-size their lives. “For some,” says Marc Leger, manager of community relations for Lakestone in Okanagan’s Lake Country, “it’s a legitimate downsizing and exploration of condo life. In other cases, I’ve seen parents and adult children invest and move into homes together, to take advantage of economies of scale and to create an affordable option for everyone.”
The demand for right sizing and lifestyle relocations is also driven by retirement and the work-from-anywhere ethos, which has made smaller communities more attractive than ever. To cater to this demographic, developers like Penticton’s Skaha Hills are focusing on main-level living homes with office space and sought-after lifestyle amenities like on-site fitness facilities, social club spaces, wineries and restaurants plus hiking and biking trails with golf and beach access nearby.
Jason Andrew, director of real estate for Crown Isle in Courtney, which is growing rapidly with infrastructure projects like a new hospital and expanding airport, believes that the disbursement trend will continue through 2022 and well into 2023, as homeowners from the larger urban centres find new forever homes in small-town paradise.
Collaborative City Planning
Development can be a slow process. To help projects complete sooner, many B.C. developers are working collaboratively with city planners, as Wilden Construction Group is on its Wilden Village project. This sustainable community in Kelowna has common spaces and a wide range of amenities, including an elementary school and preserved natural areas.
Crown Isle is also working with its engineers and the City of Courtenay to design and complete future development areas. “Our goal is to continue to work with local municipal government and other planning partners, to have as much ready to go [as possible] with projects approved for servicing, road works and new construction within the community,” says Andrew. To help further speed up the process and better meet demand, Crown Isle has also created a vertically integrated group of companies which deals with development through to marketing and sales, all within the same community.
Desire for Community
Developers are finding that a sense of community is a hot “amenity” and are tailoring their projects accordingly. They look at each site independently and design based on a variety of requirements: those might include tailoring it to fit the local vibe, the environment and location, plus local customer needs and desires.
For example, The Block, an office space in downtown Kelowna, has a thoughtfully curated mix of street-level retail that caters to the urban context of the site. “At Mission Group our goal is to not only cater to trends, but to build communities that allow people to flourish and prosper,” says Narinder Nagra, the developer’s director of marketing and communication.
A Need to Act Quickly
As of the final quarter of 2021, the BC Real Estate Association advised that the total active listings in the province are about 50 per cent below the level needed for long-term balance in the markets. Last summer, Predator Ridge sold out its Fieldglass project in only 48 hours. Currently, Lakestone has a waitlist of more than 800 interested buyers for 57 of its Summit lots.
Some developers, like Luxury Resorts, which pre-sold nine phases at its two properties (one in Radium Hot Springs and the other in Parksville), continue to see market absorption out-pace supply and expect to see continued increase in prices in 2022. “We’ve increased our pace of construction and continue to write pre-sale contracts with our customers which allows them to lock in their price at today’s value, something very few developers will do,” says Valerie Bracken, director of sales and marketing.
In other words, if you’re interested in jumping into the housing market in 2022, you will need to act quickly on pre-sales and offerings at market–while B.C.’s busy developers still have home inventory.
The Bank of Canada has made it clear that it will continue to raise interest rates from the historic lows brought on by the pandemic, but Gordon Karau, director of planning and project development for Predator Ridge in Vernon, doesn’t think this increase will impact business negatively. The supply of homes is at an all-time low in the Okanagan and, even if demand were to drop slightly due to increased borrowing costs, it would still be far in excess of supply. “If anything, rising rates will dampen the meteoric rise of home prices over the last two years and return us to something a bit above long-term average,” says Karau.
Rising rates should also remove some of the excess demand out of the system, which will give home builders, who have been coping with overstretched supply chains, shortages and dramatic price swings in nearly every building component, a chance to catch up.
Purpose-Built Accommodations and Higher Densification
The rental market will see continued pressure as increased home prices make it difficult for many to purchase, leading them to rent instead. To help service this demand, developers like Troika Management Corp. are continually looking for and pursuing new opportunities, specifically in the purpose-built rental market. “As we have done in the past, we will continue to use well-thought-out and planned designs to ensure the renters or owners of the units can live a great quality of life in our communities,” says Rich Threlfall, Troika’s president.
In Wilden’s case, Kelowna city planning asks for less urban sprawl and more multi-family units like duplexes and apartment buildings close to urban cores, allowing for higher densification of their developable pockets, Among the units that are still to come until Wilden is completely built out, roughly 2,000 single-family lots will get a lower share than originally planned. “Single-family lots are going to be even more sought after than they already are in Kelowna,” says Karin Eger-Blenk, Wilden director and co-chair.
Other developers, like Lakestone, have built flexibility into its 20-year masterplan to take advantage of trends in the market and the product requirements of buyers. That project will eventually see 1,365 owners living in a mix of dwellings including single-family and semi-detached homes, condos, villas and apartments. The Van Maren Group currently also has two “densification” projects under construction that include mixed types of housing: Shelter Bay in Kelowna and Base10 Living in Chilliwack.
Kanata International is addressing the fact that the Nelson real estate market has a very limited inventory of residential homes, especially reasonably priced ones, in yet another way. It’s Queen’s Bay Resort project in Balfour has sites primarily geared to RV living. The second phase has 32 sites that are intended for small stick-built homes or manufactured homes. “Our development is ideal for folks who would like to own an affordable home in a spectacular setting–in the middle of a golf course, clost to Kootenay Lake,” says Herman Van Reekum, vice-president of Kanata.
More Energy Efficiency
In 2022, purchasers will be looking for energy efficient, lower carbon footprints and space efficient homes. “Thoughtful design and functionality, including easy access to local amenities will be desirable,” says Troika’s Rich Threlfall.
Wilden has long been catering to this trend by building its town homes to higher-than-average standards. “We’ve been building to Energy Step Code 4 since 2016, which is just one step away from net zero,” says Wilden’s Eger-Blenk. It also invests in research into more efficient building (through the Wilden Living Lab) and its single-family home designs are geared towards simpler shapes and smaller footprints.