I am from “The Island.” Born and raised. However, any of you who have talked to me for more than five or ten minutes will know that I spent four years living in Japan and continue to have a strong connection to the country due to friends, family, hobbies, fairly regular trips back and of course my rather strong involvement with Nanaimo’s Japanese Cultural Society: 7 Potatoes.
Let’s start with why I’m talking about potatoes. Did you do a double take there? If not, my guess is that you speak some Japanese. Part of why Nanaimo is such an exotic place to people from a certain corner of the world is that it has a funny name. In Japanese, “nana” means “seven” and “imo” roughly translates as “potato” or “starchy root vegetable”. So from their perspective, our town is a pretty funny sounding place. So much so that a local once told me a story of him working in a gas station and seeing a car pull over but not opening the windows/doors or otherwise interacting with him. When he approached the car to offer his service, he saw a car load of Japanese people laughing to the point of being in tears and having to pull the car over for reasons of safety. When they caught their breath and explained why, the experience clearly stuck with him enough to recount it to me many years later.
But here’s the thing, Nanaimo is actually pretty darn amazing from their perspective regardless of the name. I’ve travelled enough and met enough people from various corners of the country/continent/planet to know that what I’m about to describe is one part of a general theme. That theme being that we are so lucky to live here. I didn’t really understand that growing up, and the gradual discovery of this is one of the various factors that led to my career in real estate. It is after all easy to sell what you believe in.
It’s very hard to put the experience of living in another culture into words. So let’s start with some images:
Ok, so I’m not much of a cameraman nor is my Japanese more than basic. But you can see the beginning of my point. As I allude to in the video, the greater Tokyo area has a population of about 35,000,000 people whereas all of Canada has about 34,000,000. Nanaimo’s greater population, that of the Regional District of Nanaimo is 138,631 but even that is trying to make Nanaimo look big considering the areas that includes as Nanaimo proper is about 87,000. Something I edited out of the video were my comments that it is in fact a totally clear day, it’s hard to see with the low resolution and all, but what you see on the horizon are not clouds that’s smog and it’s always that way over there. In Canada, we flip out about smog in Toronto or Vancouver because we can actually see it. Imagine never seeing the sky without it. Imagine only ever seeing as many stars as you can count on your fingers. Imagine a 90 minute commute on the “sardine express” being normal. Each way, every day… and you did lots of overtime this week, you have to come in Saturday, maybe Sunday and you get no overtime pay because you’re on a salary. All of this (and more I’m not getting into) is normal.
As I often say, Nanaimo is a nice balance point between city and nature. Within the confines of what is generally considered Nanaimo, one can go to anywhere to most anywhere else in 25 minutes or less. In fact, most of the time it’s more like 15-20 minutes. Nanaimo is big enough to have everything one needs to stay entertained and happy in their daily life but close enough to both ends of the nature/city spectrum for one to easily make a trip there. I mean, like within an hour. More on that here. There really is a lot to say about this so please check out that link if you’re not already living in Nanaimo.
On my way back from Tokyo a couple of weeks ago, I was flying in one of the float planes that Harbour Air runs from the Vancouver airport to downtown Nanaimo and I saw:
…and even though the BC Ferries travelling the route between Nanaimo and Vancouver is something I have been seeing regularly for the majority of my life, as it is the lifeblood of our connection with the rest of Canada, it blew my mind. I was experiencing some reverse culture shock here. For you, see, I had just spent a few weeks at my other home where there are hundreds (thousands?) of train stations where during most of the day there are trains coming and going every couple of minutes or in some cases more than that as some stations have a dozen train platforms plus cars, subway, taxis, an awful lot of bicycls and even more people on foot. My guess is that there are more people on your average Tokyo train than on two of these ferries but Vancouver island is so much bigger than that area.
The very international social scene that one finds themselves in as a foreigner in Japan, and increasingly as a resident in Canada, is full of people from simply EVERYWHERE. Those internationals who have been to my corner of the world always say the same thing. They tell me how beautiful it is and many of those people will say that we’re lucky to live there. Of course, one must tolerate the rain but life is very easy here compared to where most people live in the world. Most of us here worry about having to work some job we hate for very little pay whereas I have heard so many stories over the years from people who’ve lived elsewhere in the world where simple things like getting clean water and enough food or not getting shot at is the challenge. Those are the extremes, of course, but even those who are from the so called “first world” countries keep telling me how nice the location is and how relaxing and easy life is here.
In Canada, life is good enough for people to really care about the finer details of life and be able to share compassion rather than be in survival mode all the time. A lot of Canadians complain about relatively small things as there isn’t really a lot of big stuff to complain about but if there is one trait that we are proud of as a nation it is our capacity for compassion. Sure, we’re not perfect as a people and neither is our govenment, but really it’s pretty darn good here. And given the choice between a rainy winter and a really cold one I’ll take the rain every time.
I could write a lot about this but I think that going through the section of this blog called “Nanaimo Profile and Events” in addition to the link above to my website will help the more curious readers get a better idea of where I am coming from.
Before we dig in, let me point out that this blog has just reached four years of age and is going strong. I had over 32,000 unique visitors to this blog in 2011. My posts have been sparse of late as I was in Tokyo having fun (and doing some business too) over the holidays, but that will be the source of an upcoming post about how lucky we are to live here and have the lifestyle we have.
So... assessments. Homeowners around these parts have just gotten their property assessments last week. This governement issue document is mainly about what they think your home is worth and from this number (combined with a slew of other factors mainly about which services are available) they calculate how much property tax will be owed on that property this year.
In my line of work, the assessed value of a property is fairly frequently brought up by Sellers and Buyers alike to justify what they think a given property is worth. It is understandable that the layman would rely on such numbers for their conclusions, but when scrutinized from the perspective of actual market value these numbers do not hold up. But don't worry, they are typically on the low side... but not always.
In May of 2009, I wrote this post but as it is something that continues to come up, I will write about it once again. I will borrow from the post but I will use the latest available information to show that my position is not just something I'm pulling out of a hat.
Before attacking the accuracy of assessed value I want to point out that I think it is understandable why the taxing system works the way it does. I am not trying to blame anyone, I just want to clear up this all too common misconception as it affects people's decisions regarding real estate. This is, of course hte most valuable thing most of us ever own so it's pretty important to have a clear understanding of it.
Quite often people will tell me the assessed value (for taxes) of their property, or they will ask about the assessed value of a property on the market that they have some interest in. My answer is that although the prices are generally in the right ballpark, that they are not usually very accurate and in many cases way off the mark. Not everyone takes me for my word, and thanks to my university years I am in the habit of being able to back up what I claim. So when someone challenged me on it one day I pulled up a large sample of recently sold properties and compared the sale prices to the assessed values and created an average by use of a computer program Realtors have access to.
I just did this again for the purpose of this post. Read on if you are skeptical, curious or the sort who likes stats and numbers.
According to the program us Realtors use known as “Interface”, there were 126 properties that sold in the Nanaimo area between January 1st 2011 and Janurary 31st 2011. I chose these numbers from a year ago as the new assessment values have not been entered into our database as of yet. These numbers do however show the same pattern as when I did the same thing in May of 2009. There were 3 properties that didn’t have assessed values attached to them so they were removed from the list. I averaged the numbers on all of these listings and here is the pertinent info I found:
Average List Price: $328,356
Average Sale Price: $319,168
Average Assessed Value: $308,805
Of course, we know that the people making these assessments have not been inside the properties so they are only guessing what the places are like inside. As I understand it, hey have a budget that needs to be payed for and they have to find ways to justify the way they collect it. Now before you start complaining, think of how much more it would cost to run the system if they went to each home and made sure it was totally accurate. I don’t know about you, but I’m glad they don’t. Again, I’m not saying the system needs to change, I just think people should know what these assessments are NOT for: pricing a property that’s to be sold.
I might be labouring the point, but here are some of the more notable differences I found in that list of recently sold properties. You’ll notice that they tend to under value the properties rather than overvalue.
Sold Price Assessed Value
$299,900 $120,000
$198,000 $146,900
$145,000 $176,600
$219,900 $177,000
$130,000 $178,300
$239,900 $187,200
$257,250 $343,000
$305,000 $351,000
$352,900 $299,000
$325,000 $280,100
$175,000 $260,000
$320,000 $205,600
So, if you want a better idea of what your home is worth just contact me. It will cost you nothing but a conversation with me at your place. This is a big part of what I do for a living.
One term that you may find useful to know while searching for acreages is Agricultural Land Reserve (ALR). This is land that was set aside during the food supply scare of the 70′s so that BC would always have a certain amount of land that is zoned for agricultural purposes. It can be various sizes but from what I’ve seen it is generally 5 acres or more in our area. It is useful to know about because if you have no intentions of dividing the lot and turning it into a subdivision someday (which is exactly what ALR is for preventing) then you can often buy large plots of land for relatively lower prices than non ALR land. There are only a handful of ALR properties on the market in our area at a given time.
I'm in the process of reviewing, editing and updating my main website. What I have up on my homepage is something that I have revised a few times over the years and I think it is worth re-posting here. Each one of the reasons I list below has the potential to be expanded into a series of posts in its own right (which I have also done overthe years on this blog) but this is an introduction to Nanaimo for those who are not so familiar with it or who don't usually look at it from a real estate perspective.
So, here are the top reasons why people are looking to buy in Nanaimo (in no particular order):
Investment (for renting and/or reselling in the future)
It's the right size of a town in the right location.
It's totally beautiful here
Easy access to Vancouver
It's much more affordable than Victoria or Vancouver
Job opportunities/Transfers
Retirement
Love of the outdoors and the ocean
Social Climate
Of course, an individual buyer will tend to consider more than one of these factors in various combinations and orders of priority. There are also other factors one oculd mention but this is the larger overview.
Let's look at these one by one.
Investment Simply put, some people are interested in supplementing their income by buying a place and reselling it in a few years once property value has gone up. This is often supplemented by renting out a portion of or the entirety of the property out in the meantime to reduce the mortgage and other costs. Sometimes people will live in such a home with tenants in a suite downstairs or even have them as room mates. We have been blessed in recent years with low vacancy rates and a market that weathered the recent credit crunch much better than most of B.C., which did better than most of Canada which did better than most of the world.
Despite the relative safety of real estate as an a form of investment, 94% of buyers in 2010 bought property as their principle residence while 4% are bought specifically for investment. These stats, like those below vary only slightly from year to year.
It is worth noting though that many people are buying homes which have a suite that they are renting out as a "mortgage helper". In the past couple of years, new homes are built with such suites more and more as they make a larger investent in a home much more easy to afford.
Right size town, right location Nanaimo is central to most of the population on the east side, the most populated side, of The Island. (That's Vancouver Island to you non locals.) This is no doubt why people from all over The Island north of Victoria do an awful lot of their shopping here, as it's the second largest urban centre on the Island.
At 80,000 people in Nanaimo proper, it's big enough to offer more than just the basics but small enough to not have a lot of the social ills associated with large urban centers.
For example, you can drive from pretty much anywhere to pretty much anywhere else in Nanaimo in about 20 minutes or less. There are enough people from different walks of life and different parts of the world to give you a sense of community no matter what you're into or where you're from. It's big enough so that you can always be meeting new people every day, but small enough so that you will run into friends while out in public once every week or so.
It's totally beautiful here This one is pretty obvious. Or rather, it should be. Those of us who've lived here our whole lives may not have noticed. I for one didn't notice until I worked in the tourism information office and had a few hundred people telling me how nice it is here everyday. Then it really hit home once I started travelling a lot.
Some countries have a lot of history and old culture to enrich their lives, this tends to come at the cost of having a lot of population, and by definition comes at the cost of a lot of land having been used for human uses for centuries or millennia rather than more pristine natural uses. Canada is a country that doesn't have thousands of years of architecture and cultural history. Instead, as a young country, we have a plethora of natural places. And in my (well travelled) opinion, there are few places as beautiful as Vancouver Island in Canada despite its massive size. Our biggest competition in my eyes comes from North Ontario and The Rockies. They are however both an awful lot colder than here and the former has... well let's say it has a lot of bugs and leave it at that.
Easy access to Vancouver Most people living on The Island take the ferries to Vancouver, which takes about 2.5 hours or so including boarding and driving time in addition to riding the ferry itself. These being the kind you can take a car on, take the bus or ride as a foot passenger.
You can also fly from inside the city of Nanaimo to downtown Vancouver or Vancouver International Airport by float plane in about 20 minutes. We also have a small airport south of town from which you can fly to Vancouver's airport. Such easy access to Vancouver International Airport makes easy travel from here to anywhere you might want to go.
More affordable than Vancouver or Victoria The latest statistics available as I write this show that the average sale price of a house in Nanaimo is a little less than 60 percent of prices in Victoria, and less than half of prices in Vancouver.
I have had a number of clients over the years who have sold a modest home in the Vancouver area and used the equity to buy a home here. Because it is so much less expensive, they end up getting a much nicer home for less per month.
Job Opportunities/Transfers Some people are moving here because they've been transferred here or have been given a really good job opportunity. They often work at Vancouver Island University, Shaw's rather large service centre, or Nanaimo regional Hospital which serves people from Nanaimo as well as much of the Island for example. There are of course many other smaller facilities and businesses that people are involved in.
Retirement The Island has long been a popular place for Canadians to retire. Coastal B.C.'s mild winters bring little snow and lets it remain green year round which offers an alternative to the cold Canadian winters east of here that Canada is known for. The surge of retiring baby-boomers is just beginning and their demand for quiet, convenient, comfortable and charming places to live is just beginning as well.
Love of the outdoors and ocean There is so much to do here for people who like to get out into the great outdoors. We of course have a wide array of sports to offer like hockey, rugby, football, golf, track sports, basketball, motocross, skate parks and much more. However, these are just the beginning. The location of Nanaimo, central on an island where the ocean meets the thickly forested mountains, opens opportunities to take up sailing, fishing (saltwater and freshwater), boating and water sports of all kinds, hiking, mountaineering, rock climbing, kayaking, canoeing, skiing and more. If that's not exciting enough for you, there's also skydiving, bungee jumping, mountain biking and so much more that it's too much to mention here. This is truly a world class location for outdoor experiences.
It's not just about activites though.
This also reveals itself in the types of homes people are buying and what is available for people to buy. In 2010, 47% of all homes sold in Nanaimo had an ocean view, and 7% were ocean waterfront.
On the freshwater side, there were 3.1% with a lake view, 2.7% were waterfront on a creek or river and 2% were waterfront on a lake. 36% had a mountain view.
Social Climate Canadians are known for being sincere and caring and people from The Island is certainly no exception. Many people are drawn here from other countries by the comparatively stable/safe social climate, and other Canadians are often drawn here because off the more relaxing pace of life. Another factor is the variety of cultures that we have in one place, there seems to be a community for anyone from anywhere to be a part despite the towns modest size. A true cultural mosaic.
I've so often heard people who've moved to Nanaimo from off The Island describe it as a beautiful secret or even as a "hidden green jewel" or as "like living in a park". But the secret seems to be getting out. Even people who've lived just across the water from it, in Vancouver, for years are giving it a second look.
But don't take MY word for it. Spend some time reading about Nanaimo online, have a look at us on google maps, especially the street view function and get an idea. There is lots more about this in both writing and other media on my blog in the Nanaimo Profile and Events section.
The article below came up in the local newspaper, The Nanaimo Daily News, last week and I thought it was worth sharing despite the delay. The hotel was never built due to financial issues with the developer who was supposed to commence the build about the same time as the economy changed a few years back. This was and continues to be a time when development companies who were leveraging a fair amount of debt for projects that suddenly stopped selling as quickly as projected, for the prices projected, took a hit. We’re still seeing a bit of the aftermath and this ongoing saga with the hotel downtown is part of that aftermath.
For the armchair market watchers out there, don’t read too much into this in terms of what it means for the local real estate market. Having it built would make for a busier downtown and more revenue for the conference centre and of course tourism dollars in town overall, yes. But all of that is still just one peice of the larger, and ever morphing, puzzle that is Nanaimo’s real estate market. I am sharing this mainly to get the word out about the tax incentive because I would really like to see this hotel built. I would like to see more density and activity downtown and this is one way in which I can encourage that.
After struggling to entice developers, city considers incentive plan that includes 10-year exemption
City officials are proposing new tax break incentives to spur construction of a conference centre hotel.
Nanaimo has been struggling to entice developers to build a hotel downtown, adjacent to the Vancouver Island Conference Centre. The $75 million facility is losing about $1 million a year largely because staff can’t book larger events.
With no bids to build the hotel and a growing need to lodge guests, the city is considering a new incentive package, beginning with a 10-year municipal tax exemption.
City officials are confident tax breaks will renew interest in the VICC hotel and improve Nanaimo’s stock of quality hotel rooms, laying the groundwork for larger conferences and tourism.
The previous incentive package to build twin condos at Maffeo Sutton Park was pulled by council earlier this year.
“One of the first things hotel developers want to know is what financial incentives we’re prepared to offer,” said Mayor John Ruttan.
“After looking somewhat unsuccessfully for three years, this is something we need to look at.”
Nanaimo has been unsuccessful in finding a developer to create the dream hotel, largely because it’s expected to be a break-even operation in the short term. There are not enough tourists coming to the city to inspire investors to put up the construction costs, said city manager Al Kenning.
The hotel is supposed to go hand-in-hand with the conference centre, a facility that has been handicapped in booking large events because of the lack of hotel rooms downtown Nanaimo.
The VICC has the potential to house over 1000 guests, but finds booking more than 500 challenging. Guests would have to look outside of Nanaimo to find accommodation.
The 10-year exemption is a key issue for council to consider, Kenning said. City staff believes it will lower costs enough to make investing in the hotel more viable.
There has already been several developers interested, according to Kenning.
The tax incentive program is geared at the VICC hotel, but will apply to any development or re-development in Nanaimo. The city wants to boost the total inventory of quality rooms it has to offer tourists.
According to Ruttan there are only about 400 rooms within a kilometre of the downtown core.
Susan Cudahy, chief executive officer for Nanaimo Economic Development Corporation, calls the proposal responsible and innovative. Quality hotel rooms are needed if Nanaimo is going to market itself as a tourist destination.
I just came across an intersting article from the Wall Street Journal which I will link to below. It describes how in America’s current real estate market, the (presumably few) homes that are being built are being made to reflect a lifestyle that is more about comfort and efficient use of space and energy than being built for impressing visitors as they were doing in boom times of recent past. The end of the McMansion (cheaply built homes with lots of open spaces and doo dads to impress visitors) has arrived and they are now going back to homes that are simply more down to earth. These homes, admittedly, are not exactly smaller or without their own charm.
The reason this article strikes a chord with me is because I, like so many others, have been fascinated by watching the US market go through its dramatic downturn these past few years. Watching it play out and seeing who’s left at the end and why is this Realtor’s equivalent to how some biologists watch the struggle for survival during a major extinction and seeing what sorts of evolutionary traits end up making the difference before being passed on to future generations.
You wouldn’t know this from watching the news, but although we too have been affected in all of this we have fared very well compared to the US and so many other economies the world over. Our own lesser downturn in property values which was followed by a recovery and has since been waffling between getting warmer or cooler depending on which data you’re looking at, is still showing its own changes in terms of what sorts of new homes are available.
There is still a fair bit of inventory left over from the end of the boom in Nanaimo. It takes quite a long time to get the ball rolling from buying some property, getting zoning and permits and etc. in place let alone actually building it and then selling it. Then, there is this perception among the public that they will have to now pay HST on top of the purchase price. (Even though the full 12% is only applied to the balance over 425k, below that things are as they were before.) So, these perfectly fine places have been sitting there for a couple of years now, especially condos, and they keep getting cheaper. Some of them are amazing deals.
The market is far from dead though. I’ve had a pretty good year and the stats for the Nanaimo area suggest that I am not alone. For example, last year in October only 75 single family units were sold but this October 98 were sold. People are spending a bit more too. Similar figures have been showing up on the stats since the summer. (Actually, maybe the spring, but I was simply too busy selling real estate to think about any of this at the time.)
But yes, here too I would say that the new places that are being built are a little less lavish than those from a few years ago. Cheaper locations are more popular too. The area south of Harewood, around 9th and 10th, is being populated with lots of inexpensive homes on inexpensive land.
Anyway, here is the article that inspired the above thoughts:
This blog is as much about Nanaimo as it is about real estate. People come to this blog when they are looking for information about Nanaimo real estate as well as about the town itself. After all, if you’re thinking of moving out here you will want to get an idea of what the place is like. Today, I thought I’d share a series of photos that are part of a game that some locals are playing on a local online forum.
www.nanaimoinformation.com is a site where you can get a lot of information about Nanaimo. It has a forum where locals and non locals alike talk about things Nanaimo related. As it is the online world, the tone of the posts aren’t always from a positive disposition, but overall it is in my opinion a community of good hearted people and a great way to meet others in Nanaimo. It’s particularly good for asking people where you can find a certain product or service, or a great spot to do something like swimming or hiking that you would normally never find out about otherwise.
There are a series of threads called “Where in Nanaimo?” in which forum members put up a photo of a hard to guess location. The location is somewhere in Nanaimo and everyone else tries to guess where it is. Even for people who have lived here for many years, most of these photos are hard to guess because the easily familiar buildings and backdrops are seldom in view.
I think a lot of the photos are beautiful and worth sharing as an unorthodox photo tour of Nanaimo.
Before we dig in, let me point out that this blog has just reached four years of age and is going strong. I had over 32,000 unique visitors to this blog in 2011. My posts have been sparse of late as I was in Tokyo having fun (and doing some business too) over the holidays, but that will be the source of an upcoming post about how lucky we are to live here and have the lifestyle we have.
I'm in the process of reviewing, editing and updating my 
