After my last column I exchanged a few emails with a reader who was querying the most recent board stats. I had heard rumours that the sky is falling (again!) in the Okanagan and look at the Board stats. On reviewing the stats, I did not see anything else other than an affordability issue and lack of inventory in the lower levels of the market place (sub $400,000) and above that, I saw an active market that was running approximately 12%-115% up on last years comparable numbers in most of the pricing categories. Well, thanks to Dan who reads the column regularly and who did a fantastic amount of research and number crunching, he came to the same opinion also. Thank you Dan!

It remains to be seen what will happen for the rest of the year, but when oil is running at $120-$130 per barrel and natural gas is now trading in the $11 range, one might expect that Alberta’s resource heavy market place might be purchasing some more real estate this year, despite the state of the housing market in some parts of Alberta.

So far we are seeing some typical spring trends with waterfront buyers starting to show up on weekends and by all accounts, the slightly increased amount of listed inventory is still not satisfying the buyers tastes very well which will buoy prices in this slightly sluggish market.

Recreational Property Financing

Two notable areas of change in the finance markets are development project financing and recreational real estate financing. In many instances, complicated title arrangements ensure that a main street bank may shy away from financing a recreational purchase. This alone is very good reason for developers to work with Realtors prior to the launch of their product since the inclusions in the disclosure statement can be restrictions to retail financing. While many recreational purchases are made with existing home equity, some purchasers prefer to actually mortgage their property. Recently we have been referring some buyers to a unique product that allows purchasers to access self directed RRSP funds to acquire recreational property.

Several years ago, I wrote an article titled “FUN-vesting”. It was published in a journal called the Canadian Rockies Resort Forecast and it talked about the ability to buy recreational property using RRSP funds. At that point in time that was no easy feat for the developer with several layers of bureaucracy and legal filings required prior to sale and complications on the back end with bank financing!

Last year I had the pleasure of meeting the President of a fund that will organize the ability for you to move self directed RRSP funds into a bond that will then lend you the money for your purchase at a reasonable mortgage interest rate while also depositing a bond level of return into your RRSP account. Our clients have so far been very happy with the results and with the stock markets continuing to be as volatile as ever, it makes sense to many people to move their investment into real estate. Once the Harper government follows through on it’s commitment to remove any capital gains on real estate investments, you can expect this very popular product to really take off.

Feel free to contact us to find out more about this innovative product.