British Columbia Real Estate Investing Success in 2023
If you’re looking to start or expand your real estate investments, understanding where British Columbia real estate fits into the overall Canadian real estate market is key. This province is home to over 5 million Canadians, drawn to the scenic views, bustling metropolitan areas and thriving economy. British Columbia is located on Canada’s west coast and abuts the Rocky Mountains, offering sweeping views of the sea, snow-capped peaks and lush forests. It is also home to Metro Vancouver, one of the nation’s hottest housing markets and home to its robust film industry.
Could investing in British Columbia real estate be right for you? Read on to learn more about who is attracted to the province, the hot economic sectors and what you can expect when you dive into the market.
But first, if you would like to learn more about how British Columbia real estate can help you bolster your portfolio, click the link below to book a free strategy call with our team at LendCity today. Then, we can discuss lenders that can help you kick off your British Columbia real estate journey.
British Columbia Real Estate’s key features and demographics
British Columbia was first settled by the British in 1843 and has quickly become a thriving part of the country. It is the third most populous province, and the metropolitan Vancouver area is the third-largest in Canada, and, the second-largest in the Pacific Northwest, just after Seattle, Washington and ahead of Portland, Oregon. The province covers nearly 945,000 square km of land and is flanked by the Pacific Ocean to the west and the Rocky Mountains to the east.
The province has a great emphasis on preserving its ecosystems, with 14 major parks and protected areas, as well as four national parks and three national park reserves. These crown jewels include Glacier National Park and the Pacific Rim National Park Reserve. As you might imagine, the province has a thriving ecotourism industry as well as plenty of opportunities for outdoor adventurers and athletes. Historically, the fur trade and the gold rush were a major part of the province’s founding and economy, and we can see echoes of this in the culture and economy today.
The population is currently over 5 million, with 2.5 million of those residents in the Metro Vancouver area alone. The University of British Columbia, located in Vancouver, is home to over 46,000 students across undergrad and graduate programs all by itself, and the province boasts many other reputable universities and technical colleges.
Recent statistics show that the province’s median household income is $76,770, right on par with the average for the entire country. About 30 percent of British Columbia’s residents hold a bachelor’s degree or higher, which is concentrated in metropolitan areas. It also has the highest concentration of visible minority populations, clocking in at 27 percent of the total population. It also has been steadily gaining in interprovincial migration, indicating that it is a “destination” province—a designation backed by its robust real estate market.
Currently, the average age of British Columbia residents clocks in at 41.5, and with nearly 16 percent of the population over age 65, it has the highest elderly population west of Quebec. If you’re looking to break into the market, you can expect that there will continue to be a great need for senior housing and ageing-in-place accommodations, with student housing and urban housing making up another significant portion of the housing need.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
A focus on British Columbia real estate, service and construction
British Columbia’s economy is dominated by its real estate income, making it a very hot market if you can break-in. The second and third-highest sources of the GDP are service and construction, but there is also a rich agricultural and resource extraction industry within the province. Historically, it has been a resource dominated economy, starting with the fur trade and gold rush and continuing with forestry and farming.
Because British Columbia is located on the Pacific Ocean and is the terminus of two different transcontinental railroads, there is a significant shipping and cargo industry, too.
The service industry—which, if you include real estate, makes up 72 percent of the province’s GDP—is the highest in Canada. In British Columbia real estate, finance, corporate management and insurance make up the largest subsections of service professions, and most new jobs fall under the service or construction penumbra.
Of course, there’s also the film industry, which makes up a significant portion of the GDP, too. Vancouver is often referred to as “Hollywood North,” the third-largest film production area in North America, after the Los Angeles and New York City metropolitan areas. Film producers are attracted to the area for its lower filming costs, and the city is often used as a stand-in for San Francisco, California and American Pacific Northwest towns.
Overall, British Columbia is Canada’s fourth-largest GDP—studies in 2017 showed that it generated over $282 billion in income. While the province has historically experienced a boom and bust economic pattern, there is every indication that British Columbia will continue to thrive thanks to its industries, location and natural resources.
Best Places to Buy British Columbia Real Estate
Vancouver, British Columbia
Most real estate investors will start their hunt for British Columbia real estate by looking in the province’s biggest city: Vancouver. With a population north of 675,000 (and growing), there is plenty of opportunity for great deals. The issue with finding a great investment opportunity in Vancouver is knowing which neighbourhoods to scout.
In Vancouver, the term most commonly used to describe emerging neighbourhoods is an energy hub. In the past, the term “gentrifying” was the most popular term to describe an investment-worthy community. That’s no longer a broad enough (or accurate enough) term to describe a good investment opportunity. Instead, an “energy hub” is a community that is seeing an influx of new people and a revitalization of the local economy. To pinpoint an energy hub, make sure to look for neighbourhoods that skew younger and offer plenty of opportunities for nightlife.
By that definition, Mount Pleasant and False Creek shine brightly as possibilities in the Vancouver area. If you’re interested in something that has a bit longer odds, check out the Hastings Corridor. While this neighbourhood doesn’t have the hippest reputation, it’s smack dab in the middle of the city and surrounded by some of the most popular communities. Perhaps that’s why several significant developers are purchasing property throughout the Hastings Corridor.
Novices should consider going rural
When you first break into the British Columbia real estate investment market, you no doubt have lofty long-term goals. After all, who doesn’t want to ascend to the heights of real estate domination by erecting a massive high rise in the city center? That’s admirable, but jumping right into commercial real estate is impossible for the vast majority of people. Most first-time investors don’t have the experience or capital to jump into the deep end. Indeed, when you search for even modest residential real estate investment opportunities in the city center, you may find good properties coming up short.
That said, where you might see a problem, there is an advantage. As a result of the novel coronavirus, more and more people are moving out of densely-populated cities and into the surrounding small towns and suburbs. They’re searching for more space and bigger rooms for a discounted price. Fortunately, the rural areas of British Columbia offer both of those in spades. Even better for novice investors, the cost of real estate properties is much easier to handle.
Kitimat, British Columbia
When it comes to real estate investment opportunities in Western Canada, they don’t get much better than Kitimat. This is thanks to a new liquefied natural gas pipeline sponsored by LNG Canada and two Canadian oil companies. The construction of the pipeline is proceeding with support from all 16 of Canada’s First Nations tribes; as a result, a lot of the negative publicity often associated with pipelines has been avoided in this new project.
What’s more, the pipeline promises to train new employees and bring a host of other oil-and-gas friendly businesses along
Terrace, British Columbia
All the people moving to Kitimat will need food to sustain themselves. That’s where the neighbouring community of Terrace comes into play. While Kitimat focuses on industrial development, Terrace is transforming into a massive agricultural and technological zone. One company is in the process of a $100 million development deal at the city’s industrial park. Commercial real estate in particular is doing well. In the last few years, building permits for commercial dwellings have jumped more than 300 percent.
Of course, Terrace brings more to the table than its vast tracts of land. The city also has an airport and several retail options for families at every income level.
Abbotsford-Mission, British Columbia
An investment in the Abbotsford-Mission area is an increasingly sure bet, partly as a result of the exodus from Vancouver and partly because of the city’s impressive infrastructure. On the residential side of things, detached homes are selling for upward of $850,000 and growing. If you’re interested in commercial real estate, you’ve hit the jackpot in Abbotsford-Mission. The province’s industrial vacancies are among the lowest in the nation. The city is also a massive agribusiness hub. As the unrivalled agricultural center of Canada, the Abbotsford-Mission area produces three times more farm receipts than its second-closest competitor (the Niagara Region).
If you want to get in on the business side of real estate, Abbotsford is the place to begin your search.
Vancouver Island, British Columbia
If you’re located in the western part of the country and want to dive into the vacation rental property game, it’s time to check out Vancouver Island. This beautiful stretch of land is home to quaint European culture and vast areas of natural wonder. Tourists from all over the world come to Vancouver Island to take a break. Whether walking through the woods in hopes of spotting a native black bear or setting out onto the Pacific Ocean in search of whales, there’s an incredible amount to do while visiting Vancouver Island.
Since the rest of Western Canada is on the rise, it’s only natural that people will inevitably want to celebrate their economic good fortune with a vacation.
As long as you focus on properties that fit within your budget, British Columbia has plenty of investment opportunities for every investor experience level and budget.
Other considerations
Before you pull out your cheque book and get ready to buy a rental property in British Columbia, there are a few considerations you should be aware of.
First, British Columbia imposes a property transfer tax, which you must pay before taking ownership of a property. The tax rate is levied at 1 percent for the first $200,000 of the price, then goes up to 2 percent for the remainder, up to $2 million. Residential properties over $3 million pay another 2 percent on any portion greater than $3 million. That means the average $1.4 million Vancouver home will come with about $26,000 in additional property transfer taxes—something to consider when you’re deciding on your ideal budget and mortgage requirements.
Recreational property is also experiencing a huge surge in popularity. Sales of vacation homes in coastal and other resort areas are increasing, making this an excellent time to consider investing in vacation rentals. This is partially because it’s difficult to afford homes in the urban city centres, but it also reflects the higher average age of British Columbia residents.
Another large portion is young, highly-paid professionals looking for an escape from the hustle and bustle of British Columbia’s major cities. If you’re considering vacation rentals, look for properties that are within a day’s drive of major urban areas. To appeal to the most potential renters, you want a property that’s suitable for driving up on Friday evening, spending the weekend and driving back on Sunday afternoon or Monday. With the outdoorsy appeal of British Columbia’s lakes, parks and forests, your rental could have significant income-generating potential.
British Columbia Real Estate in Short
If you’re looking for a piece of property in a hot market, you can hardly do better than British Columbia real estate—but that high demand and high rental income potential comes with property prices and taxes to match.
This coastal province is home to a rich ecotourism industry, multiple internationally renowned colleges and a highly educated populace, making it one of the greatest destination provinces in the country. Whether you’re considering a rental in a hot market or a vacation rental in the bucolic backcountry, British Columbia has a lot of exciting opportunities for new investors and those looking to expand their portfolios.
If you’re interested in networking with other British Columbia real estate investors, there are multiple options on Meetup, including groups specifically tailored towards finding and sharing great investment opportunities with investors in the region and beyond.
British Columbia Real Estate Professionals
We have searched high and low for British Columbia real estate professionals. Below, you can find professionals we have researched and can confirm they specialize in working with Real Estate Investors.
To ensure the maximum success investing in British Columbia real estate, or any city, you should always use professionals who understand and work with investors, your income depends on it.
This list may not fully list all the professionals in the area, but the ones we have personally investigated and that we would refer our clients to.
If you’re a British Columbia real estate professional and would like us to consider adding you to the list, please contact us.
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Alternatively, if you would like to discuss investing in British Columbia real estate and financing your investments, click the link below for a free strategy call with our team at LendCity today.