Western Investor picks five hot housing markets for residential investors in 2014, including a couple of small-town sleepers that may hold the best potential in the West.
Langley Township
Langley Township's household growth is expanding by 1,125 per year, second only to Surrey as the fastest pace in B.C. The average detached house price is $447,000 and it posted the biggest increase, up 2 per cent, of any Fraser Valley community since 2012, reports Canada Mortgage and Housing Corp. The rental vacancy rate is a healthy 4.4 per cent.
In the first seven months of this year, total commercial building permits in the Township reached $24.6 million, well above the five-year annual pace of $21 million. But another number may be as important: new home construction year was more than $250 million as more than 650 new homes broke ground.
South Delta
South Delta could be the next hot housing destination, as witnessed by the sales success of the Tsawwassen Springs condo development and golf course, the beaches, the two pleasant towns – Ladner and Tsawwassen – that anchor it; its proximity to Vancouver; and its reasonable housing prices. Detached houses sell for about half the price of nearby Richmond.
Lately, South Delta realtor phones have started ringing a lot – and they will likely keep ringing for years. The reasons are obvious: the new bridge to replace the aging Massey Tunnel with work to start in four years; the largest mall in B.C., Tsawwassen Mills, to be built near the B.C. Ferry terminal; the new billion-dollar South Perimeter Road freeway that opens in December; and the 950-home, 540-acre residential development being pushed forward by Century Group, all of which will generate jobs and a further population surge.
Calgary
The Urban Land Institute’s annual Emerging Trends in Real Estate 2013 ranked Calgary Number One in investment prospects, development prospects and second in homebuilding prospects. The survey of real estate professionals found that 55 per cent ranked Calgary’s apartment sector as a “buy.” The apartment vacancy rate in Calgary is 1.1 per cent and rents have increased 7 per cent in the past year. There are no rent controls and young workers and immigrants are pouring into the Alberta’s largest city.
MLS housing sales are running 11.5 per cent ahead of last year and average house prices were up 8 per cent to $435,900 as of September. The New Housing Price Index from Statistics Canada for Calgary is up 6.1 per cent from 2012, the strongest in Canada. Meanwhile, housing starts are expected to rise 4.4 per cent next year to 10,000 units.
Fort St. John
A sure sign of an emerging hot real estate market is when buyers are willing to buy condos before they are even built. Cue gas-fired Fort St. John, where the first condo presales in the northern B.C. city recently hit the market. Mitch Collins of Century 21 in Fort St. John said he expects many of the townhouse and condo units to sell to “investors from down south”.
Fort St. John has a shortage of serviced land, a growing population and an average detached house price of $330,000, the highest in northern B.C.
But the boom may just be starting. BC Hydro’s $6.5 billion Site C dam project, just 7 km. from Fort St. John, is just gearing up.
Weyburn
Weyburn Saskatchewan saw its population spike 11.1 per cent from 2006 to 2011 to just under 11,000. The reason is the giant Bakken oil fields which has triggered a long-play regional boom.
Weyburn will see 100 new condominiums start this year, along with about 300 new detached houses, according to Martino Verhaeghe, the town’s director development and planning. Building permits average $3 million per month, are double what they were in 2012. But Weyburn should be adding another 250 homes per year to keep pace with population growth, according to local home builders.
The average house price in Weyburn has doubled in the past five years, with the average detached house now selling for north of $240,000. The apartment rental vacancy rate is below 1 per cent, and rent for a two-bedroom apartment is in the big-city $1,100 per month range.
For hot market information, see Western Investor's December issue
