Writen by Henry Schlee
Everyone has a property investment story, and in Western Canada the stories often have a pretty strong Whistler element. Whistler has in the past offered spectacular payoffs for property investors. You could in 1980 have bought a prime waterfront property on the lake in Whistler for $10,000. Today the land alone would command $2m upwards, and other plots of land can sell for $3-4m. Add a house and you could be looking at up to $20m (the – ludicrous - price being asked for 'The Couloir', a ski-in, ski-out location on Whistler Mountain. Prices have at least doubled in the last 5 years. Talk to realtors in Whistler and you will invariably be told that there is still considerable upside. Is there any mileage in buying in at these prices?
The quick answer is: probably not. Rental yields in Whistler are currently hovering around 1% net, with many people not even making enough to cover their taxes, let alone make a positive return. Add debt into the financing structure and you are looking at an asset which costs you significant money every month you own it. You are essentially speculating on either a continued decline towards 0% in the yield that other investors are willing to accept, or a dramatic turnaround in occupancy levels and rates to compensate. There is no reason to believe in either of these events.
The facts are that while the rest of the property market in British Columbia stagnated for years, Whistler grew like crazy, peaking at about the same time that the rest of the BC market bottomed out, circa 2002. The market is almost entirely divorced from the factors which drive prices in the rest of the province (interest rates, unemployment levels, wages, general optimism about the strength of the economy). Rather, the market is linked to demand for Whistler skiing from the international community which can afford the elevated prices that Whistler requires. And this demand has declined precipitously, made up for by demand from the local (Vancouver) market as well as the Seattle market. So while visitor numbers are up, the value to be extracted from these visitors by property owners is well down, since local visitors stay for less time and are way more price sensitive.
So the canny investor should continue to stay out of the market. Economic fundamentals suggest that this market will stagnate or decline for quite a few years to come. However, that is no reason to avoid visiting Whistler, which continues to offer fabulous skiing and excellent restaurants, as well as all its other attractions. If you're looking for accommodation try this link for a range of Whistler chalets in all parts of the resort.
Author is the owner of Holiday Whistler which has an extensive range of chalets, condos and townhomes for rent, from one to seven bedrooms. Try this link to explore their range of Whistler lodgings, or, if you are still interested in buying into the property market, try this one for information on Whistler property management.
1 comments:
The answer is maybe/maybe not....but the facts are that there are many great real estate investment opportunities for buyers to get into the Whistler market. Whether you are a first time home buyer looking for a starter property or if you are looking for a rental income property there are many properties that would meet your needs, provide positive cash flow and equity gain...what more would an investor want. I agree that Whistler offers one of the best resort experiences worldwide, whether summer or winter we have it all. I have worked and lived in other resort communities and can tell you that the richness of our community in Whistler is far and above many others. With the development of arts and culture and the new venues and activities around the Olympic games, not to mention a new highway and our building cap, we have a very bright future. You might rent the first time you visit the resort, but if you fall in love with this place, like so many of us have be sure to call a competent realtor to educate you about our unique marketplace.
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