Nanaimo Real Estate from an Outside Perspective

The following info is something I have written to be translated into Japanese  for a website that targets Japanese nationals and investors to invest in/buy real estate in my area and country. Although the specifics are targeted at such an audience, the broader scope of the information is useful for people of all countries including our own. Many people are quite unaware of some of the details listed below even if they themselves have done a handful of real estate transactions here in the past.

There is a great deal of information that can be covered on this topic, but I will focus on the aspects which I believe are particularly poignant for those who are not particularly familiar with our area who are looking for a good place to invest, live or have a vacation home.

 

West Coast Lifestyle

People around the world, including many Canadians who’ve never been out to this end of the country, see Canada as a land of cold. Although in the larger picture there is truth to this, we must also keep in mind that it is a huge country with many climates. Japan for example, is a very small country but the difference in climate between Okinawa and Hokkaido is quite dramatic. Having spent my university years on the east coast of our country, I can tell you first hand how different the climates can be despite being at the same latitude.

Some people in Canada refer to the west coast as “the banana belt” of the country. This is perhaps an exaggeration, but when you consider that most of the country endures winters that are at least as cold as Abashiri and that the west coast’s winters are basically the same temperature as Tokyo, the analogy makes some sense.

Vancouver Island is 31,285 square kilometers, which is similar to Kyushu’s size of 35,640 square kilometers. It is not, as the name suggests, where Vancouver is located but rather right next to Vancouver. Nanaimo is central to the east coast of Vancouver Island and those with an ocean view in Nanaimo can see the lights of Vancouver across the water if they are facing the right direction. Nanaimo, Vancouver Island’s central location for retail shopping and  thoroughfare to and from Vancouver, is 90 minutes from Vancouver by giant ferry and a mere 20 minutes by float plane. The float planes can take you from downtown Nanaimo to downtown Vancouver or to Vancouver’s international airport. I have found this service particularly useful before and after the long trans pacific flights to and from Japan.

On Vancouver Island, we have easy access to both the city life of Vancouver and the true wilderness of remote areas of Vancouver Island. Within a five minute walk of many neighbourhoods or even from your own backyard you will be able to see bald eagles, deer, raccoons, beavers and much more. In the ocean we have a great variety of fish which are exported internationally as well as to Japan. Last time you had a particularly expensive piece of salmon or komochi kombu, it probably came from our area.

If seeing wildlife is of interest to you, there are many places nearby where you can take boat tours to see things like Orcas and other whales, sea loins and seals. You could also venture into the various forests and mountains with a tent and some supplies and spend as much time as you would like away from other people. A level of privacy and quiet that is virtually unobtainable in Japan but is easily and cheaply found here.

However, if it’s physical activity that you’re craving, then perhaps the nearby ski hill (Mt. Washington), the many places to go rock climbing, hiking, water skiing, mountain biking, sky diving, hang gliding and more will interest you. I am also told that Nanaimo is one of the best places in the world to scuba dive.

But it’s not all about nature. That’s just one of the things we have to offer in this area.  At about 100,000 people, which is admittedly small by Japanese standards but medium by Canadian standards, Nanaimo is full of shopping centres and has a wide variety of restaurants and bars. If you live downtown you can walk to and from these places from your apartment or house (with a grassy yard). But like I said, if it’s city life you crave, it’s just a 20 minute plane ride away. That is after all about how long it takes to take the express line from Matsudo to Ueno or to take the Yamanote line half way around its circuit.

Nanaimo, like Canada overall, is a cosmopolitan community. There are a wide variety of people who have moved here from elsewhere in the world and made it their home and people from Japan are no exception. Students move here to improve their English at the university (Vancouver Island University) and many stay for a time afterwards as they come to enjoy the relaxed, friendly lifestyle that we have here. There are of course also couples, and families of varying sizes with varying ages of members who move here from Japan every year. Then, there are those families who are of Japanese descent who have lived here for many generations. Those who arrive as single though, will generally end up in a relationship with someone of another race/culture, be it Canadian born or not.

Typical Examples of Homes in the Area and Real Estate Prices and Trends

When I lived in Tokyo, I was in a 3LDK perched on top of a hill which measured 55 square meters. My Japanese co workers were shocked by the size of my place since I lived there alone. To them, it was a home that was appropriate for a family, not a lone gaijin. On the other hand, my Canadian friends back home were quite surprised at how small my home was. After all, as you will soon see, our homes and our towns are much larger and more spread out and so too are our expectations of what we get for the money we spend.

It is worth noting at this point that property values in Nanaimo are roughly half of those in Vancouver and two thirds of Victoria although market trends of up and down are historically roughly the same when considered over a longer trend.

To be clear, what I am about to describe are typical examples. I have been in condos for sale in Nanaimo that are 600 square feet and cost $110,000. I have also seen houses that are 5,000 square feet, have an amazing ocean front views, their own private beach, multiple buildings, as much land as a reasonably large city park, 6 bedrooms and 4 bathrooms for $2,000,000.  These are two ends of the spectrum of a wide variety of kinds of homes.

First of all, let me give you a few (Mid 2012) examples  found in the Nanaimo area. Similar, if only slightly different, prices and examples exist in neighbouring communities  like Parksville, Qualicum, or Ladysmith which I do also serve. From these examples you will notice that one of the fundamental differences between buyers and tenants in Canada and those is Japan is that the age of the property is not nearly as important to us as it is to someone in Japan. Providing that a building is properly maintained, it will continue to accumulate value for many decades.

Here are some real and not uncommon examples:

This property was built in 1988 and just recently sold for $365,00, which by Nanaimo standards is an average priced house. It had also sold in 1995 for $151,000. There is no doubt that renovations have played a role in its increase of value, as has inflation but as I have mentioned and you will soon see, property values increase over the years.

This property was built in 1992 and  just recently sold for $160,500. In 1993 it sold for $97,900.

It is worth noting that in recent years the exterior (windows and siding etc.) was completely redone and it was an expensive bill for the owners at the time. The leaky condos issue in our area of the 1990’s is another topic altogether. I’ve decided to include this example as it illustrates what is currently available at what price as well as the broader point that property values of the buildings hold up over time here more so than they do in Japan.

This property is fairly new by our standards. It is 7 years old. It recently sold for $650,000 which makes it a very nice home by our local standards.

The following graph shows the average sale price of houses single family homes in Nanaimo by year rom 1982 until 2011. This statistic does not include lots, mobiles or condos/townhomes, but is the standard basis by which we measure market patterns here.

Statistics, by nature, simplify. So if you want to go beyond what the statistics show, you are more than welcome to come to me with specific questions.

You will notice from the graph that real estate prices here go up in the long run, which I imagine is true of almost anywhere if only due to inflation. It is worth noticing here how much faster the property values increase over time compared to inflation. In the short term the average sale price changes may be relatively flat or go down in value but it is simply a matter of time before they go up again and reach an ever higher value. This pattern made from averages is very similar to what happens to the value of most properties over time if properly built and maintained.

The most important thing to understand when investing in Canadian real estate as that although,  there will be times when the market value drops but in the long term the value will rise. Trends take quite a bit longer to develop and change so you will not see an overnight crash like some kinds of investments, but even in the worst scenarios you will have weeks if not months to work out a prediction of what is coming and how to weather it.   It is a matter of having patience and properly managing the property. Depending on the type of investment you choose, the details of your strategy will of course vary.

If for example you are buying existing homes with the intent of renting them out and perhaps later renovating and selling them for profit, then you will want local, reputable property management to take care of it until the market conditions are right. (I generally recommend holding on to it rather than selling it though, as rental revenues will increase over time along with the property’s value. There is also the matter of costs associated with selling.)

If you are looking to get involved in creating a development such as a subdivision, a condo building or a hotel, then you will of course need to know a variety of details about financial and real estate market conditions so that you know when it’s the right time to buy the land, apply for permits and then start building and selling the property. Such things may seem obvious, but some of the details will be different than what you are used to in Japan which is why we are here to guide you. Local bylaws and the customs of business will of course also be something to contend with.

Some Other Details That are Different Than In Japan

Different parts of one country will have variations in the details of how things are handled. Of course it is more so when it is a different country.

When you buy a property here, it is sold “as is”. That is, there is no warranty on the property from the Seller. If it is a fairly new property, (under ten years) there will be certain levels of warranties in place that the builder has set up. However, when properties are sold, the Seller has to disclose anything and everything they know about the property that may affect its use or value. There are standardized signed documents that are specifically for this purpose in almost any sale as local real estate law takes disclosure very seriously.

The buyer also hires a Home Inspector who goes to the property and tries to find anything that is wrong with it so that the Buyer can know about it before they finalize the sale. Home Inspectors are by nature so thorough that even if a home is well built and brand new, they will still find small details/imperfections that the Buyer will want to know about even if only for maintenance purposes. If it is later found that the Seller did not disclose something that they should have then the Buyer may take the Seller or their Realtor to court, but this rarely ever happens.

There are typically no fees for a Realtor’s services when you are buying real estate. Realtor’s commissions are deducted from the sale price of the home on the Seller’s end.

As a Realtor, I can work with a buyer to help them buy any property that is being advertised as by sale by any of my competing Realtors. They can also bring Buyers to any of my properties being offered for sale. We all share our listings freely in order to maximize the chances for a good fit and subsequent sale between Buyers and Sellers.

A little about me

My name is Ryan Coffey and I was born and raised here on Vancouver Island and I am a Realtor based out of Coast Realty in Nanaimo. Thanks to my marriage to a Japanese lady who I met during my fours years living in Japan, most of my family is Japanese in both blood and spirit. I spent one year working and living in Osaka and three years in Tokyo. For work, I spent most of my time in Japan working at Berlitz where I taught (mostly) private English classes with business people from middle and upper management of large companies, Lawyers, Doctors, government employees for example.  Some of my students were real estate professionals who I have kept in touch with and learned quite a bit about how the system and laws in Japan differ from ours. I do speak Japanese on a conversational level but not well enough to write website content. This is all to be translated and proofread by my (Japanese) business cohorts.

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