Nanaimo or Kelowna?

[joe123]

I`m a new member, I`m invested in Edmonton, even after getting burned here severely before I followed the fundamentals

, but looking to move to Kelowna or Nanaimo to be closer to family since my wife and I just had a little girl, and we are all alone in Edmonton.
Anyways, the rental market in Nanaimo seems strong, however the "Alberta Panic Plague" has some people panicing in Kelowna from what I`ve seen, plus the huge inventory could mean a big buying opportunity. I can find 8% rentals in both. Any suggestions? Which is the better place to buy? I plan to buy a house, rent out the basement. Are attitudes as gloomy about real estate in Kelowna and Nanaimo as Edmonton?

 

[Jack]

Anyways, the rental market in Nanaimo seems strong, however the "Alberta Panic Plague" has some people panicing in Kelowna from what I`ve seen, plus the huge inventory could mean a big buying opportunity. I can find 8% rentals in both. Any suggestions? Which is the better place to buy? I plan to buy a house, rent out the basement.

Well, where would you rather live?

This sort of brings up the whole "house v. home" argument. If you`re wanting a "home", buy a home that you can afford in a place that you want to live and enjoy a high quality of life.

If you`re wanting a "house" - an investment - buy where the growth-oriented economics are strong. And I`m not sure they`re that strong for either region. I know that Demographia.com has Kelowna rated as the least affordable Canadian housing market, and I believe that Nanaimo is dependent fairly strongly on the forestry industry, which has taken a beatdown this year with no real signs of life.

 

[Thomas Beyer]

QUOTE (joe123 @ Aug 31 2008, 11:50 PM) I`m a new member, I`m invested in Edmonton, even after getting burned here severely before I followed the fundamentals

, but looking to move to Kelowna or Nanaimo to be closer to family since my wife and I just had a little girl, and we are all alone in Edmonton.
Anyways, the rental market in Nanaimo seems strong, however the "Alberta Panic Plague" has some people panicing in Kelowna from what I`ve seen, plus the huge inventory could mean a big buying opportunity. I can find 8% rentals in both. Any suggestions? Which is the better place to buy? I plan to buy a house, rent out the basement. Are attitudes as gloomy about real estate in Kelowna and Nanaimo as Edmonton?
Nanaimo has much stronger fundamentals .. and is closer to Vancouver (2h by Ferry) .. and midway between Victoria and CampbellRiver/Comox/Courtney area - both growth areas also! Better weather .. better upside .. more in-migration from AB, Victoria and lower mainland (all higher priced) !

Kelowna and is about 5h from both Vancouver and Calgary .. has very poor economics and very poor jobs .. except construction which is now way way down and several projects in foreclosure or halted .. plus it is very hot in summer and overcast/grey in the winter .. what is the attraction besides the 2-3 summer play months ? Prices will drop probably 30-40%.

If you can`t make money in Edmonton, I`d suggest you assess your abilities and strategies .. as any other place will be more difficult !

If you wish to combine lifestyle, family and upside I`d vote NANAIMO 6 out 10 times (and 4 out of 10 being Edmonton)

 

[TomB]

30 - 40% drop in Kelowna??? When do you see this catastrophic slide beginning? CMHC Market Outlook for Spring 2008 puts Kelowna in a much more favorable light than you. So did ReMax. I`m not saying your estimate is wrong but I`m curious how you got there.



QUOTE (thomasbeyer2000 @ Sep 1 2008, 10:58 AM) Nanaimo has much stronger fundamentals .. and is closer to Vancouver (2h by Ferry) .. and midway between Victoria and CampbellRiver/Comox/Courtney area - both growth areas also! Better weather .. better upside .. more in-migration from AB, Victoria and lower mainland (all higher priced) !

Kelowna and is about 5h from both Vancouver and Calgary .. has very poor economics and very poor jobs .. except construction which is now way way down and several projects in foreclosure or halted .. plus it is very hot in summer and overcast/grey in the winter .. what is the attraction besides teh 2-3 summer play months ? Prices will drop probably 30-40%.

If you can`t make money in Edmonton, I`d suggest you assess your abilities and strategies .. as any other place will be more difficult !

If you wish to combine lifestyle, family and upside I`d vote NANAIMO 6 out 10 times (and 4 out of 10 being Edmonton)

 

[Thomas Beyer]

QUOTE (TomB @ Sep 1 2008, 12:35 PM) 30 - 40% drop in Kelowna??? When do you see this catastrophic slide beginning? CMHC Market Outlook for Spring 2008 puts Kelowna in a much more favorable light than you. So did ReMax. I`m not saying your estimate is wrong but I`m curious how you got there.
not all properties, of course, but many overpriced ones ! maybe 10-20% for an average home / condo ..

many condo projects have been canceled .. and some are in foreclosure already !

look at affordability (price / average income) .. and even Quebec looks more attractive compared to Kelowna !

parts of AB and parts of BC are overbuilt, as is Kelowna, so a correction in prices / inventory will happen over the next 2-3 years !

 

[GarthChapman]

I think Thomas is right on what may happen with Kelowna property values. We just sold this month an apartment condo near The Grande, and it took well over 3 months to get it done. The sale price was off the high of last year by nearly 15% and I think we were lucky to get our unit sold. Inventories are very high and sales are well down.

 

[TerryF]

We purchased a condo in Kelowna 3 years ago. Bought for $189k, now worth about $250k and it rents for $1300/mo. so there is positive cash flow. We have gone back and forth over whether to sell it as we wonder about the market there. Some think the market will improve in Kelowna again when Alberta`s market improves as the bulk of the buyers are coming from Alberta. So we planned to hang onto it. Now I don`t know. Is it getting time to sell there? Next spring maybe, when activity typically picks up? Or is it time now?

 

[Thomas Beyer]

QUOTE (TerryF @ Sep 1 2008, 03:47 PM) We purchased a condo in Kelowna 3 years ago. Bought for $189k, now worth about $250k and it rents for $1300/mo. so there is positive cash flow. We have gone back and forth over whether to sell it as we wonder about the market there. Some think the market will improve in Kelowna again when Alberta`s market improves as the bulk of the buyers are coming from Alberta. So we planned to hang onto it. Now I don`t know. Is it getting time to sell there? Next spring maybe, when activity typically picks up? Or is it time now?
maybe you get $225K to 230K today .. minus realtor fees, taxes and legal .. i.e. break even !

keep it if it cash-flows .. of course it will be worth more 5 or 10 years from now .. can you hold until then ?

 

[gkeary]

I`ll jump in and say I agree with Thomas re: Nanaimo. I have owned a duplex there for several years so have kept my eye on it from Vancouver. It is more affordable than Victoria, close to Vancouver and services the central island and northwards. It`s not just about forestry any more.
gk

 

[TerryF]

I already factored in a drop in price when I estimated $250k. A less desirable unit just sold for $260k about a month ago. So today $250k at least, but what might it be next spring? Same, lower? We can definately keep for 5+years, but maybe this money would be put to better use elsewhere? eg. Alberta. It doesn`t help though, that we love the place. Emotional purchase long before my REIN membership, but it has done okay despite our ignorance. Still wonder though if it isn`t time......

I fully appreciate your comments, since we are rookie REIN members. Thank you!

T.

QUOTE (thomasbeyer2000 @ Sep 1 2008, 04:05 PM) maybe you get $225K to 230K today .. minus realtor fees, taxes and legal .. i.e. break even !

keep it if it cash-flows .. of course it will be worth more 5 or 10 years from now .. can you hold until then ?

 

[GarthChapman]

QUOTE (TerryF @ Sep 1 2008, 02:47 PM) We purchased a condo in Kelowna 3 years ago. Bought for $189k, now worth about $250k and it rents for $1300/mo. so there is positive cash flow. We have gone back and forth over whether to sell it as we wonder about the market there. Some think the market will improve in Kelowna again when Alberta`s market improves as the bulk of the buyers are coming from Alberta. So we planned to hang onto it. Now I don`t know. Is it getting time to sell there? Next spring maybe, when activity typically picks up? Or is it time now?

We paid 227k two years ago (our purchase was a 2005 price on a pre-built basis and we knew the Developer) and got 327k this month. If yours is cash flowing why sell? A reason to sell would be if you could put the capital employed to a more productive use (ie a higher ROI or more cashflow).

We sold because the gain was good after a trwo year hold - but it was not cash flowing and we saw a falling market with a mid to long term turn-around. So we judged we could put our 115k into a more lucrative project.

 

[joe123]

Thanks for the comments... I was leining towards Nanaimo... Just worried about forestry and the sudden surge of listings, but I can still find cash flowing properties there. Does anybody reading this live there? What is the word on the street? Are they as paniced and gloom and doom as people in Edmonton? I`d love to take advantage of that, like I should be doing in Edmonton