A decision to drop property prices by half in three phases of single-family development has resulted in 16 quick sales at Tobiano, developer Mike Grenier said Tuesday.
The resort launched a campaign over the weekend with advertising in Kamloops, Vancouver, Edmonton and Calgary announcing it would lower prices by 50 per cent on most of its single-family lots remaining in the three phases.
The marketing effort stems from a need to pay off millions of dollars in financing for roads, sewer, water and golf course development. The developer has sold some multi-family sites to other developers but operated single-family property sales itself.
"It's prudent to pay your horizontal (roads, sewer, water) costs and we've done most of that," Grenier said. "We want to wrap up and take advantage of low costs in construction."
About 75 properties, many of them estate-sized lots, are available in the campaign.
In addition to providing needed cash, Grenier said sales ensure construction activity continues at the resort.
"The economy today means you have to finish what you started and and then you get on to the next thing. Construction activity begets activity."
Paul Fabri, a market analyst with Canada Mortgage and Housing Corp., said the cut in prices is happening elsewhere in B.C.'s Interior but is not across the board at every resort or subdivision.
"They're trying to move lots in a time where demand is less than a year ago. I don't think what you're seeing (at Tobiano) is terribly unusual."
Fabri said he's seen price reductions of 30 to 40 per cent at some developments, whether in receivership or not. He said The Rise, a Vernon golf course development, recently dropped its prices by 30 per cent.
"Some of them I've seen a 30 to 40 per cent decline. They might have been listed for that but did they sell them for that?"
Grenier said purchasers will not only save on property costs but can also take advantage of lower construction costs. Together the two make possible a new single-family home at the resort possible in the $450,000 range.
The developer said those who have purchased lots at significantly higher prices realize the economy has shifted.
"We have an economic slowdown. Prices, whether for real estate, stocks or automobiles, have gone down."