From no strata fees to discounted golf, Okanagan developers using promos to sell homes
From three years of no strata fees to paying no GST, developers in the Okanagan are giving away freebies to attract buyers.
Purchase a new two-bedroom condo at Predator Ridge's new Vista Condominiums, starting at almost $900,000, and they'll throw in up to $30,000 of perks which could include not paying strata fees for three years to getting a deal on golf club membership.
Closer to Okanagan Lake in Vernon, Sailview Townhomes, just off Okanagan Landing Road, are enticing buyers with no strata fees for a year along with a "housewarming gift" of free gas and groceries. The developer, Carrington Communities, puts the value of the freebies at $1,500 a month.
The deals are in stark contrast to the real estate market two years ago, where buyers put in offers well above the asking price in the hope of clinching the sale.
"The market has been... a bit slow for the last 20 months so these little incentives are helping our sales," Kelowna realtor Scott Aaltonen told INFOnews.ca.
Aaltonen currently has a deal to wipe the GST on a brand-new development at Lake Country Villas. It will save the buyer about $60,000 on the $1.18-million home.
As buyers only pay GST on brand new property, it's a way of levelling the playing field in a housing market where buyers have a lot to choose from, he said.
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Data from the Association of Interior Realtors show there are currently 50% more properties on the market in the Central Okanagan than this time last year, and twice as many as two years ago.
Aaltonen said they wiped the transfer tax fee to sell the last of the $1.4-million walk-out rancher homes early this spring.
"The deals in the last few months are some of the toughest I've done in a while," he said.
And the promos have worked, as he only has one property left where the GST will be wiped.
"Buyers are... picking and choosing, so they are pushing their weight around... things that you wouldn't normally ever bring up in a retail environment or being done right now," he said.
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Buyers have asked for all the furniture in the house to be thrown in while others have asked for rooms to be repainted.
While the steep rise in interest rates has generally been credited with slowing the market, Aaltonen said at the price point he sells at most people are older and either mortgage-free or only carrying a small mortgage.
To drum up sales at the Sailview Townhomes in Vernon, they have a sales event June 22. There's a food truck, face painting and a scavenger hunt.
"The market is nuts, it's been very slow everywhere," sales manager Brenda Moritz said.
The development at 7599 Klinger Road will eventually contain 28 townhomes, with prices starting at $685,000 for a three-storey, three-bedroom, 1.5-bath townhome with a double garage.
Currently, eight are complete and four more will be ready in the next few months.
"As half of the development is near completion we just want to sell them," Moritz said.
Unlike the seven-figure prices in Lake Country, the Sailview Townhomes cater to a different clientele who largely do need to borrow money from the bank.
"People are hung up on interest rates," Moritz said.
It is a sentiment shared by Vernon realtor John Deak who said people are just holding off because of the high interest rates.
"The affordability just isn't there," he said.
Deak said if people are in a position to buy they definitely can negotiate right now.
After more than 20 years in the business Moritz said it's not uncommon to have promos to incite people to buy.
Aaltonen said when the HST came into BC more than a decade ago – and added an extra seven percent tax to a new home – it changed things.
"Back then we were having to run a lot of promotions," he said.
So will the Bank of Canada's recent interest rate cut make much of a difference?
It's likely too early to say but Deak has noticed a slight change.
"My phone is definitely busier than it has been all year," he said.
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