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Canada’s Top Areas For Pre-Construction Buying: The Okanagan, Kootenays, and Vancouver Island

While the rest of the nation is holding its breath waiting to see how pre-construction unfolds in its major urban centres like Toronto, Vancouver, Calgary and Halifax, we ask our Canadian Real Estate Wealth readers this important question: do they want to follow the crowd or stand out from it? If it’s the latter over the former, then perhaps a better strategy is for us to turn our collective minds to secondary Canadian markets. 

We enlisted the assistance of highly knowledgeable Sylvia McNamee, Director of Ace Capital with Ace Project Marketing Group, one of Western Canada’s fastest-growing real estate sales and marketing firms. Through Ace Capital, Ms. McNamee is dedicated to building community by facilitating investment into funding residential developments while making housing more accessible.

When we asked Sylvia if it was strategically advantageous for investors to focus on primary urban markets or secondary ones, she shared her thoughts:

We’re not focused on urban centres, but on secondary markets like Kelowna and the Kootenays, and on southern Vancouver Island in commuter areas like Langford, Colwood, and Sannichton. These areas have shown the ability to ‘bubble’ from large fluctuations in the real estate market because of the high demand from buyers that are priced out from urban centres, even as we see prices continue to drop in major cities. Because we focus on pre-sale developments, buyers can purchase a property in a location they want now but without the need to lock into a mortgage until the property is constructed and ready to deliver (usually 18 to 24 months), which allows plenty of time for interest rates to go down as projected by Bank of Canada.

Canada's Top Areas For Pre-Construction Buying: The Okanagan, Kootenays, and Vancouver Island

The secondary markets may not seem as common sense as larger markets may, but the appeal is two-fold. Markets such as Kelowna, the Kootenays, as well as Langford, Sannichton and Colwood, aren’t as flooded as the Vancouver, Toronto and even Halifax markets. The second reason these secondary markets are worth a second glance is that they are being very purposeful, arguably more purposefully, about appealing to the right client profile.

Take, for example, The Kootenays. This region of British Columbia starts at the Alberta border and stretches west to the Monashee range of the Columbia Mountains. The key to this area from an investment perspective is exactly what it’s renowned for – its laid-back lifestyle and endless outdoor adventure opportunities. This is a secondary market that knows who their people are; they’re folks that made the decision to locate in safe neighbourhoods with great schools, surrounded by unrivalled natural beauty and limitless outdoor activities.

When we focus our attention on Southern Vancouver Island, I can’t help but be reminded of the famous Mark Twain quote “Buy land, they’re not making it anymore”. On Vancouver Island, this is what they call a nice problem to have. The many breathtaking mountains, winding rivers, and picturesque lakes make Vancouver Island a beautiful place to live and have also made a lot of lands undevelopable.

Kelowna with its four distinct seasons in the Okanagan has also built a reputation as an affordable, but incredible place to leave. It’s one of the most reputable places in the Great White North for its incredible growing conditions leading to some of the best produce and wine that you have tasted north of the border. This perfect melange of conditions leads it to be a highly sought-after locale to live and invest in.

Beyond the draw of the geographic majesty that draws people into these areas in droves, the economics make a lot of sense (and cents) as well.

The Central Okanagan area is heralded as one of Canada’s fastest-growing regions. This perfect confluence of conditions leads it to be a highly sought-after locale in which to live and invest. It was also recognized as Canada’s fastest-growing city by Statistics Canada in 2022. It has built and continues to scale up on fiscal momentum and play a key role in Canada’s economic recovery.

We turn once again to Ms. McNamee for her insight into the economic landscape of Southern Vancouver, the Kootenays and Kelowna. Here’s what she had to say on the matter:

Interest rate changes don’t carry the same weight when we look at affordable home sales in many secondary markets, particularly Kelowna where the need for affordable housing supersedes other market conditions. There simply isn’t enough affordable housing available and the rental market is one of the tightest and most expensive in Canada. Working with North America Home Finance and Millennial Developments, we’re currently offering the Collinson Rise Development Project which allows passive real estate investors the opportunity to partner with the developer and bring much-needed, affordable, quality homes to the market. We know this structure works, particularly in the Okanagan, as in May 2022, we completed the Five Bridges Development Project which funded the Five Crossings residential development, with both the investment offer successfully reaching full subscription and the real estate offer of 207 homes selling in 72 hours. It’s a unique structure that opens up real estate investing to a greater number of Canadians while supporting the local economy and allowing more Kelowna families to invest in themselves by making the move from renting to owning.

But don’t just take it from Ms. McNamee and us, The Honourable Mélanie Joly, Minister of Economic Development and Official Languages, in an announcement said the following, “We will build on existing momentum in our economy and ultimately create more meaningful engagement between regional businesses and the Federal government.

Canada's Top Areas For Pre-Construction Buying: The Okanagan, Kootenays, and Vancouver Island

If you’re still wondering if the secondary markets are for you, allow us to share some statistics with you. These economic indicators are a great demonstration of the areas’ appeal. From 2021 to 2022, the population grew by 2.8% and housing starts in the Kelowna Central Metropolitan Area are up by 3.6% from 2021 to 2022, bucking the national trend by going in a positive direction.

In Conclusion,

The difference between a leader and a follower is often the courage to be on the starting line. In looking at developments like Five Crossings we can see how being a trendsetter in affordable housing has worked very much in its investors’ favours.

If you’re interested in getting more information on North America Home Investment’s latest investment opportunity in Kelowna, Collinson Rise, which offers a targeted 9% preferred annual return and shared profits upon sale of the residential building, visit www.collisonrise.com or learn more at www.nahomefinance.com.

About the Author

Heather McDowell is a mother and a REALTOR®. Heather has spent most of her real estate career selling residential real estate, and its leasing and has dealt with the additional complexities of the cottage, timeshare and rural properties, and condominiums. She has dabbled in new construction and is expanding her portfolio to include commercial sales and leasing. Heather is also a dedicated volunteer for both the local women’s shelter and a national hospice organization and is an emerging playwright. Heather describes her focus as diversifying real estate content that not only addresses national matters but explores those issues unique to each province and territory. You can contact Heather at heather@crewmedia.ca or find her on socials at: Facebook – https://www.facebook.com/thestoreytellingcompany/ LinkedIn – www.linkedin.com/in/heather-mcdowell-98134118b Instagram – https://www.instagram.com/hmcdowellrealty/  

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