B.C. consumers often dismiss manufactured homes as a housing option, but the rise of Millennial buyers,  B.C.’s runaway housing prices – and modern new designs – may put Canada’s most affordable homes on buyers’ wish lists this year.

Typical homes in B.C. manufactured home parks often sell for $250,000 or less, a fraction of the cost of detached houses, which average $893,000 across B.C. and $1.8 million in Greater Vancouver.

Some manufactured home park owners are now introducing bright, contemporary designs that are light years removed from a traditional trailer.

The Big Maple manufactured home park, which is located near Davis Bay beach on the Sunshine Coast, for example, has set up and sold 22 Click Homes, a locally-made house design from Click Modular Homes, that average around 1,000 square feet with two bedrooms.

The modern factory-built homes were sold over the past three years, but mostly since 2020, at prices that started at $298,000 and are now in the $334,000 range, according to Big Maple co-owner Ellie Stoscher.

This compares with a benchmark Sunshine Coast detached-house price of $838,900 in May, up 43 per cent from a year earlier, according to the Real Estate Board of Greater Vancouver.

Big Maple buyers also pay a monthly pad rental fee of $500.

Stoscher said she bought adjoining land to house the Click Homes, which are set along their own street in the park. “We are nearly sold out now,” Stoscher said, with just five home sites left and two of those are already claimed.

Big Maple is an age 55-plus community, which, she said, slowed  Click Home demand.

“If we could sell to Millennials, we would have sold all of the homes in five minutes,” Stroscher said.

Individual buyers of manufactured homes on a rental pad usually require 35 per cent of the purchase price as a down payment, but the financing, often through a local credit union, offers similar mortgage rates, terms and insurance as in the traditional housing market.

The big difference in B.C. is the hundreds of thousands dollars less that the mortgage will cost.

Manufactured home parks are also popular with investors, according to Eugen Klein, president of the Klein Group, Vancouver, which specializes in sales of the parks.

In 2020, 28 manufactured home parks were sold in British Columbia. While this was down 10 per cent from a year earlier, the value of sales increased 16 per cent, year-over-year, to $103.1 million, according to the annual B.C. Mobile Home Park Report from the Klein Group.

Klein said manufactured home parks are demanding higher prices this year, which has compressed the capitalization rate, but it still remains an average north of 6 per cent, which is among the highest for any real estate sector.

“In Cariboo, for example, you may get a 6.5 per cent cap rate, which is much better than a 2 per cent cap for a rental apartment building in Kitsilano,” he said

Klein said Vancouver investors are getting the message: over the past two years 60 per cent of buyers of B.C. manufactured parks have come from the Lower Mainland.

“Almost none of the buyers plan to live in the parks,” Klein said, noting that a well-designed park with solid infrastructure is often a low-maintenance, turnkey investment, and are popular with those seeking retirement income.

Multi-family investors find capitalization rates as high as 10 per cent in Northern B.C. towns, but such rates also reflect risk in the boom-and-bust region

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Northern British Columbia has a become a patchwork of economic islands, with some centres seeing steady performance, others remarkable growth and yet other towns are suffering declining real estate values and high vacancy rates.

But the risk is part of the reason that multi-family investors can find capitalization rates three to four times higher than in Metro Vancouver.

In Fort St. John, the second-largest city in the north and among the centres that should be sharing in the rapidly-emerging liquified natural gas (LNG) industry, the city is nearly alone in B.C. in seeing overall assessed property values decline in the past year, down 2 per cent, according to the B.C. Assessment Authority.

Ron Rodgers, owner/broker of NorthEast BC Realty, said local commercial real estate is characterized by high vacancy rates for both offices and retail with little industrial action being seen.

Rodgers believes it could be six months before the city sees an uplift, starting with the re-opening this year of Louisiana Pacific’s oriented strand board mill, which employs about 190 people, rising LNG prices.

Yet Rodgers recently sold an 18-unit apartment block at $70,000 per door with a cap rate in the 7.5 per cent range, though the city’s rental vacancy rate is double-digits.

In Chetwynd, a small town a 90-minute drive north of Fort St. John, property values are up 8 per cent year-over-year and the rental vacancy rate is near zero. In April, a 30-unit, 30-year-old multi-family rental complex sold in Chetwynd for $6.6 million, nearly twice its assessed value.

“The property had multiple offers and went for an area-high of $110,000 per door,” said Chris Haynes of Oakwyn Realty Ltd. of Vancouver, which brokered the deal. “It had a cap rate of around 10 per cent.”

This compares to annual yields as low as 2 per cent to 3 per cent in Greater Vancouver multi-family properties, where per-door prices can be north of  $400,000.

Key reasons for the Chetwynd property boom is that two LNG pipelines are coming through the town this year - the Coastal Gas Link project and the Enbridge Sprucewood pipeline loop - and very little has been built in the town in a number of years.

“Hotels are full, and campgrounds and RV parks have been full for the past two years with [pipeline] workers, “ said Naomi Larsen, executive director of the Chetwynd Chamber of Commerce.

She added that average townhouse rents are $1,800 and even one-bedroom basement apartments rent for $1,000 a month. But she cautioned that, once the pipelines move on, Chetwynd may slumber.

B.C. Premier John Horgan said orders will be issued by April 23 that will restrict people's ability to leave their health authorities.  The measures will continue in the May long weekend.

"At this point, non-essential travel should be limited to local travel only,” he said.

The premier reinforced Provincial Health Officer Dr. Bonnie Henry's message from last week, encouraging British Columbians to stay in their respective neighbourhoods. 

All current guidelines and orders will remain in place. However, people will not be able to book camping spots outside of their respective health areas because the tour operator in that community will not book them. 

On April 23, Minister of Public Safety Mike Farnworth will issue orders under the Emergency Program Act to restrict people's ability to leave their health authority.

"This will be conducted through random audits, not unlike roadside stops for a counter-attack during the Christmas season. They will be susceptible to all travellers, not just a few travellers, and again they will be random and there will be a fine if you are travelling outside of your area, without a legitimate reason," said Horgan.

Horgan stated that BC Ferries will stop accepting bookings for recreational vehicles like campers and trailers as of April 23. It will also be contacting its passengers that have booked reservations to make sure that their travel is essential and not recreational.

Additionally, the province will be putting new border signs along the Alberta border, reminding travellers coming from outside the province, that unless they're coming for essential business, they should not enter B.C.

Leisure travel allowed smaller hotels and motels in secondary cities to perform better than hotels in large cities that rely on international and corporate bookings, according to HVS International.  The outlier hotels and motels saw revenue per available room fall 40 per cent in 2020, but hotel revenue in bigger cities dropped by an average of 70 per cent in 2020, compared to a year earlier.

The BCREA Commercial Leading Indicator (CLI) reached a new high since the start of the series in 1999. The CLI rose from 139 to 144 in the fourth quarter of 2020, representing the second consecutive increase after four consecutive quarterly declines. Compared to the same time last year, the index was up by 5 per cent.

Commercial Indicator Reaches High in Q4 2020