Allan Jenner’s

1st QUARTER REPORT from WHISTLER

While the home market in Greater Vancouver neared record numbers in March for sales and saw the Housing Price Index increase 5.4%, our market remained tepid. The ratio of sales to listings continues to put downward pressure on pricing for most products, the one exception being chalets under $1,000,000 where prices seemed to have stabilized. This could signal the beginning of a change for chalets and other non-nightly rental townhouses and condos, as it is often at the entry level where change first appears. The main driver of this segment of the market is buyers from British Columbia, and the Lower Mainland in particular. Recent reports show consumer confidence in British Columbia improving and given the rise in pricing of Lower Mainland homes over the last few years, we now represent better relative value than in the past.

 The value of nightly rental properties is dependent on the revenue they can generate. This segment continues to suffer from the decline in destination tourists over the last five years resulting in both low occupancy levels and low room rates; unless Whistler can reverse this trend these properties will continue to see a decline in their value. Stopping the decline will be further exacerbated as our dollar continues to strengthen and interest rates start to rise. Competition for tourist dollars is extremely intense, played out in a world arena and price sensitive. Whistler institutions will need to bring their “A” game to deal with this problem; it won’t be easy nor will it be solved by the “Olympic effect”.

 Whistler Blackcomb Holdings stock closed at $11.60 on Tuesday April 6^th, down marginally from the $12.10 close on January 7^th referenced in my last newsletter. My theory that this would represent a good proxy on how business in the resort was fairing may prove to be wrong. While it would appear Whistler/Blackcomb is having a good season the same can not be said for the rest of the business community. Retailers and restaurants owners in the Village report sales are down for this winter season and they blame pay parking for dislocating normal pedestrian traffic flows. Day visitors are parking at Creekside or day parking lots 6, 7 and 8 on Blackcomb and at the end of the day they get into their cars and never get close to the Village. This is particularly irritating to business operators already suffering from the reduction in destination tourist traffic.

 There is a recurring theme here. Destination tourist visitors are key to Whistler Village’s long term well being. If their numbers don’t start to increase then hotels, shops and restaurants in the Village will continue to suffer. Businesses will close their doors, vacancy levels will increase, rents will decline, maintenance will be deferred and infrastructure will deteriorate. This issue should be foremost on everybody’s mind when decisions are being made. Going forward we need our leaders to ask “Will this increase tourism?”, “Will this be good for business?” before establishing policies, otherwise the Village as we know it is not sustainable. I also find it staggering that the RMOW could plan on increasing taxes in an environment where so many of its constituents are experiencing financial difficulties.

 If you would like to discuss the above or any other matter regarding Whistler real estate please contact me.

 Allan Jenner 

Tel 604-905 2821

Email allanjenner@wrec.com

http://oldsite.whistlerrealestate.ca/realtors/44/newsletters/153

NEWS RELEASE

For Immediate Release

January 4, 2011

 ASSESSMENT NOTICES SENT TO PROPERTY OWNERS IN THE RESORT MUNICIPALITY OF WHISTLER AND THE VILLAGE OF PEMBERTON

Value of provincial assessment roll exceeds $1 trillion for first time

 WHISTLER – More than 15,200 property owners in the Resort Municipality of Whistler and over 1,200 property owners in the Village of Pemberton can expect to receive their 2011 assessment notice in the next few days.

 Assessments are an estimate of a property’s market value as of July 1, 2010. This common valuation date ensures there is an equitable property assessment base for property taxation.

Real estate sales determine a property’s value which is reported annually by BC Assessment on assessment notices.  Local governments and other taxing authorities are responsible for property taxation and, after determining their own budget needs this spring, will decide their property tax rates based on the assessment roll for their jurisdiction.

 “The majority of homes in the Resort Municipality of Whistler are worth slightly less on this year’s assessment roll than they were on the 2010 assessment roll,” said Jason Grant, Area Assessor. “Most home owners in Whistler will see decreases in the -2% to -5% range. In addition, Pemberton property owners can expect assessments similar to the 2010 roll with changes in the -5% to +5% range.”

 Changes in property assessments reflect movement in the local real estate market and can vary greatly from property to property. When estimating a property’s market value, BC Assessment’s professional appraisers analyze current sales in the area, as well as considering other characteristics such as size, age, quality, condition, view and location.  

 Overall, the Resort Municipality of Whistler’s assessment roll decreased from $11.020 billion last year to $10.849 billion this year. This reduction reflects changing market values for many properties but also includes $231 million in subdivisions, rezoning and new construction. 

 Overall, the Village of Pemberton’s assessment roll decreased from $493 million last year to $491 million this year. This reduction reflects changing market values for many properties but also includes $11 million in subdivisions, rezoning and new construction. 

The examples below demonstrate local market trends for properties by a geographic area; trends are affected by many variables.

“Property owners who feel that their property assessment does not reflect market value as of July 1, 2010 or see incorrect information on their notice should contact the BC Assessment office indicated on their notice as soon as possible in January,” said Grant.

 BC Assessment’s website provides a listing of property assessments and sales to help property owners understand their property’s market value and provide comparable sales information. Go to www.bcassessment.ca and click on the e-valueBC link.  Copies of neighbourhood assessments are also available at local area offices and most municipal halls and government agent’s offices across the province.

 “If a property owner is still concerned about their assessment after speaking to one of our appraisers, they may submit a Notice of Complaint (Appeal) by January 31, for an independent review by a Property Assessment Review Panel,” said Grant. The panels, independent of BC Assessment, are appointed annually by the Ministry of Community, Sport and Cultural Development, and meet between February 1 and March 15 to hear formal complaints.

 The Vancouver Sea to Sky assessment office is located at Suite 200 – 2925 Virtual Way in Vancouver. During the month of January, office hours are 8:30 a.m. to 5:00 p.m., Monday to Friday.

 For the first time in British Columbia’s history, the total value of all 1.9 million real estate properties on the provincial assessment roll has surpassed $1 trillion.  For more information on the 2011 assessment roll and regional and province-wide real estate market trends please visit www.bcassessment.ca and click on the 2011 assessment roll information link.

For More Information:

 Jason Grant

Area Assessor – Vancouver Sea to Sky Region

BC Assessment

Office Phone: (604) 739-2450

Toll Free: 1 (800) 661-1780 local 450

 The number of listings has declined about 15% since the high water mark of last summer. Notwithstanding this decline in listings, the rate of sales shown above is still quite low to the current level of listings and this supply/demand dynamic continues to put downward pressure on pricing. I looked at several complexes in Whistler and prices have come down between 15% and 20% from the peaks before the financial crisis in 2008. While the housing market in Vancouver has stabilized over the last several months, Whistler, being a resort community, will need the economic recovery in North America to become more evident before our market stabilizes.

 Whistler Blackcomb Holdings stock price, the public company owning 75% of the Whistler Blackcomb Limited Partnerships, should be a good proxy for how the resort is doing business wise. It closed on Friday January 7^th at $12.10 and its initial offering price was $12.00. Early anecdotal reports for this winter season are favourable. 

Whistler is competing to get tourists to come here. A major front in this battle will be pricing, thus we have to get our costs down to be able to offer better pricing. In that regard we are told by the RMOW that property taxes will increase for 2011 and, as we know, property taxes are an important component in many businesses’ operating costs.

 The RMOW’s budgeting process now under way implies that the only choices to cover the forecasted deficit are to cut services and/or raise taxes. Clearly there are other choices; cancel capital expenditure programs and cut costs and operate more efficiently. I am informed that more than 50% of the municipality’s budget is comprised of wages and benefits. It becomes obvious that this is an area where they should look for cost savings. All institutions, if left alone, will experience bureaucratic creep in the number of employees and pay grades over time and become less productive. 

 There are other ways of raising tax revenue without increasing taxes on existing owners. We could allow redevelopments that increase density and expand the tax base. This could be done without increasing Whistler’s footprint. To accomplish this in a meaningful manner we would have to scrap the self imposed bed unit cap.

If you wish to discuss the above or any other issue regarding Whistler real estate please feel free to contact me. Happy New Year.

Like all resort communities in North America, Whistler’s real estate sales continue to suffer from a lack of consumer confidence caused by the economic malaise in the US and Europe. The US situation is of particular importance to Canadians as it remains our main trading partner and it is difficult for our consumers to feel confident while the US continues to struggle. I do not see our real estate market strengthening until it becomes apparent that the US economy has turned the corner. The number of listings shown above has stopped growing in the last quarter, however, the ratio of sales to listings remains weak and we continue to experience buyers’ market conditions. Notwithstanding the above, I continue to be bullish about the outlook for Whistler real estate for the medium and long term, given the continuing forecasts for growth in the Lower Mainland’s population and the relative ease of access to Whistler from the Lower Mainland where a majority of buyers live.

The Chamber of Commerce, Tourism Whistler, the Resort Municipality of Whistler and Whistler-Blackcomb are working together to develop coordinated strategies to address Whistler’s economic sustainability. The goal of this effort is to increase the number of tourists coming to town with experiences that go beyond skiing, snowboarding and biking. The emphasis will be a focus on “cultural tourism” that encompasses the arts, education, entertainment, personal wellness, etc. Local businesses will be asked to get behind this effort by supporting individual events such as the film festival, farmers market and native cultural centre to name a few. Steve Tome from the University of Waterloo has been engaged by the RMOW to facilitate the process to develop action plans for the future.

Who will be the owner of Whistler-Blackcomb remains an unknown.  A recent article in the Globe and Mail indicates that Intrawest has been unsuccessful in finding an institutional buyer willing to pay their price and are now exploring the option of a public offering. Intrawest’s inability to get top dollar for Whistler-Blackcomb was attributed to the lack of diversity and limited growth opportunities associated with the current business model.  As mentioned before the pressure on Intrawest to raise cash remains and Whistler-Blackcomb is their most valuable asset. It would be helpful to get this issue resolved. Stay tuned.

The HST came into effect on July 1, 2010. The tax applies to new residential construction, often vacant land and commercial properties, not re-sales of residential property. Residential properties that are engaged in nightly rentals are deemed commercial and thus HST applies.

If you wish to discuss the above or any other issue regarding Whistler real estate please feel free to contact me.