Okanagan Home Investors

As we predicted in our earlier reports, interest rate increases are doing little to soften the appetite of the Okanagan home investors. We are expecting to see another 0.5% increase in current Bank of Canada rates for the rest of the year, but even with that, indicators are that the Okanagan will experience another banner year.

A quick scan of the Okanagan Mainline Real Estate Board stats for February will show that whilst the actual numbers of transactions have increased marginally over last year, the dollar volume of transactions is up approximately 25% February 2006 over February 2005 and Year to date comparisons show an approximate 30% increase in dollar volume of transactions.

If we had a concern, it would have less to do with the pressure from interest rate increases that may not soften the Okanagan housing market but will serve to create hardships for our indebted society, but rather with the trickle down effect of oil prices as it relates to consumer products. Everything from household consumables to appliances will be impacted by the increasing costs of materials and transportation. The more local segment of our market is sure to feel the impacts of inflation caused by the costs of these products, and that will have an impact on available cash for debt servicing.

Seniors Housing Crunch

You are probably tired of hearing about the baby boomers, yet from Barbie dolls to Corvettes their impact upon the economy cannot be ignored. The next upcoming stage in their life cycle is retirement and, much against their will, old age.

A recent survey by the developers Del Webb found that 59% of boomers plan to relocate when they retire. Here in the Okanagan that means look out, here they come! They want to be able to lead a life that is “foot loose and fancy free”. They have been mowing the lawn and shoveling snow for too long and they are ready to have some fun, they deserve it!

Developers of course are starting to adapt to this emerging trend, and already new concepts in retirement homes and assisted living are beginning to emerge. Of course, the most interesting and exciting are the most glamorous. Check out www.hyattclassic.com Hyatt group are offering rental retirement communities. They incorporate a high level of comfort, service and health care. According to their website they offer striking architecture, richly designed interiors, personalized service, gourmet chefs and access to the latest in health care. You can retire in decadent style overlooking the bay in Monterey and enjoy art classes, computer instruction, lectures, concerts, book clubs, fishing and walking trips, fitness classes. However, if that is all too much like hard work, just let the massage therapists and the classically trained chefs take care of you. These communities are located in desirable resort locations like Scottsdale, in Arizona, Monterey in California and Naples in Florida. We are obviously not old enough yet in Canada to warrant such accommodation or maybe we just can’t afford it, nowhere on the web site could I find a price tag. Lets just leave that to the imagination! We believe that the Okanagan will see an evolving trend of “Resort Retirement” communities as the pressure from the Boomers for “Retirement Lifestyle” forces developers to look creatively at their business plans.

How about those of us who have always wanted to retire and see the world. According to the Journal of American Geriatric Society, living on a cruise ship is a viable and cost effective alternative. Adventurespa.com offer cabins for sale on their cruise ships and residentialvessels.com offer condo size apartments on an ocean liner with a fully equipped 120,00 sq ft hospital, a grocery store and all the other luxury amenities you would expect to find on your cruise. Just imagine, sailing off into the sunset for a life of freedom on the ocean wave, but do expect the grandchildren to want to visit.

Yet for many of us are these realistic options?. We are painfully aware of the ever-increasing cost of health care, and the delicate issue of public/private health care here in Canada. The cost of housing in desirable locations is also increasing dramatically, as we are experiencing here in the Okanagan. Developers will need to come up with increasingly creative ideas to be able to accommodate this upcoming bulge in the population. Increased density housing, with no maintenance and suitable amenities available will be desirable. More single-family homes may have in law suites. Perhaps complexes could be built that combine medical training facilities with senior housing, where students can get accredited for their training hours.

It will be a fascinating trend to watch as it emerges, as of course, baby boomers always do things differently, creating their own markets and initiating a wealth of new ideas. Personally I think that after having had so much fun writing this, when I will retire you will find me hanging out down at the local university, sipping lattes and debating life, the universe and everything.,.. that is until my ship comes in.

There are several very good and profitable reasons to buy a resort condo/home:

1. The resort market places you are contemplating buying in are some of the most pressured and heated real estate markets you can find, and will likely remain that way for the next ten to fifteen years.

2. The opportunity to benefit from first phase pricing allows you as a buyer to develop a "lift" from the pre-programmed price increases that a developer will often work into their programs.

3. The rental revenue can contribute greatly to your costs of ownership and financing, which means you can build your asset base faster with less effort.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.