Overall, the housing market in Nova Scotia is poised for even more growth as the economy on this tourist island expands. In fact, the expected economic growth for 2013 is 1.4 per cent, which, if met, would be the best performance in Atlantic Canada according to the Canada Mortgage and Housing Corporation. For the following year, it is projected to be 1.7 per cent.
5) Sunshine Coast
Peak season: A definite chance of full booking from May to end of September; Short-terms thereafter
Best buy: Waterfront separate guest cabins or whole homes
Average rent: $150 a night
The name “Sunshine Coast” evokes a summer vacation hotspot, but in recent years the area has been redeveloped to appeal to visitors even in winter months. Now one of Canada’s affordable, all-season holiday destinations, this vacation rental market offers investors numerous options for cash-flow generation.
“Historically, the Sunshine Coast has been mostly a spring/summer destination. However, over the last five to 10 years we are not seeing our population dramatically decrease in the off season,” says Joel O’Reilly of the Brynelsen O’Reilly Group, Royal LePage Sunshine Coast. “The area now offers something for everyone at all times of the year, including the winter months, such as snow-shoeing, cross-country skiing and storm watching. Investors looking to rent properties can now realize year-round benefits.”
According to Tourism Sunshine Coast, the vacancy rate is very low to zero in the summer months, holidays and spring break. In this peak season, visitors flock to the coast for golfing, hiking and biking, spas, tours, music festivals, restaurants, boating, and endless nightlife activities.
Local RE/MAX realtor Fran Miller thinks the vacation rental market hasn’t yet peaked. “It’s a great place for income generation because it is a growth market – more tourists are coming every year, and the average single-family home price in last 12 months was $414,000,” she says. “When compared to other markets close to Vancouver, such as Whistler, Victoria and Salt Spring, Sunshine Coast offers affordability and accessibility.”
The cap rate varies depending on property type, as does the rent an investor can expect. According to Miller, the average nightly rent on the Sunshine Coast is $125–$150, with waterfront homes fetching almost $100 more, bringing in approximately $250 per night.
As for sale price, O’Reilly reveals that waterfront properties are a lucrative investment choice in this vacation rental market.
“The average price is approximately $400,000 for a three-bedroom, two-bath traditional non-waterfront home, but waterfront homes would have an average price of approximately $750,000. They go up into the multimillions, depending on house quality, lot size, frontage and location.”
Certain markets will yield more in monthly income than others, as will properties that have amenities, such as a hot tub. Miller, an investor herself, points to Franklin Road in Gibsons as one area that attracts renters easily and frequently on account of its closeness to the beach and its general feel.
“Pender Harbour in general is a great buy these days, with plenty of waterfront. Hopkins is affordable and would be booked solid all year long if you could get a waterfront home there,” she adds.
The close proximity to Vancouver is a draw for many – Sunshine Coast is just a 35-minute ferry ride from West Vancouver – as is the cottage country feel.
The Sunshine Coast Bed & Breakfast, Cottage Owners Association is the governing body for 93 vacation rental owners in the area. According to the association, 41 per cent of its members own cottages, 36 per cent own bed and breakfasts, and 23 per cent own suites. O’Reilly says cottages on the waterfront are a sound choice for investors, particularly given the current climate in other nearby tourist markets such as Vancouver.
“Currently, we find that oceanfront properties are most commonly purchased by investors, as our prices in relation to the rest of BC and Canada are so affordable,” he explains. “West Vancouver, for example, is a 40-minute ferry ride from the Sunshine Coast; however, oceanfront property there is as much as 10 times as costly.”
Editor's Note: An earlier version of this story incorrectly referred to the region of Canmore Kananaskis as a town. Also, Canmore is south of Banff, not north.
From Canadian Real Estate Wealth Magazine, a monthly publication focused on building value through property investment, covering topics such as values and trends, mortgages, investment strategies, surveys of regional markets and general tips for buyers and sellers.