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 $365,000, 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.
