Recreational Condos Take Off in Ontario

Written by Posted On Wednesday, 24 January 2007 16:00

Ontario's The Village at Blue Mountain resort had no snow and no skiing during the Christmas holidays due to unseasonably warm weather, but that's not discouraging investors. At the halfway point of its development, Blue Mountain is generating the second-highest occupancy rate and the second-highest rental revenue in the Intrawest network, and because of those numbers, it's generating a lot of interest among investors. Just as the condominium market has been booming in recent years in Ontario's urban centres, the recreational condo market is also strong.

At The Village at Blue Mountain, 20 per cent of the homeowners in the resort own more than one property, and 98 per cent of owners participate in a rental program that pools revenues within their development, generating rental income even when their unit remains empty.

The resort, which was launched in 1999, now gets more annual ski visits than either the Whistler resort in B.C. or Quebec's Mont Tremblant. Blue Mountain currently has 705 condo hotel suites, townhouse units and single-family home sites, which will grow to 1,400 by completion in 2011. It features an assortment of retail shops and restaurants, as well as year-round activities and golf courses.

Because of its close proximity to Toronto and the Golden Horseshoe, the resort does big business during the week with business meetings, and a planned $12.9 million state-of-the-art conference centre will include 140,000 square feet of conference space -- enough to host major trade shows.

"We survey all of our homeowners, and most of them do buy their homes as an investment," says Debbie Lafave, director of real estate for the development. "The families here could put their money into other types of investments, but this way, while their kids still want to ski and vacation with them, it's a way to have a little fun with their portfolio."

Owners who participate in the rental pool can keep up to 10 days a month for personal use. Blue Mountain manages all the details of renting and maintaining the units, which come fully furnished and equipped. Many other investors purchase units and never use them.

Lafave says that marketing a new resort in Ontario is much different than selling at either of the other two large Intrawest resorts in Canada. "Whistler clients are passionate about the place, and Mont Tremblant people have a love affair with that mountain that may be generations old. People from Ontario go to those resorts as well, but they can sniff out a good deal. They are probably driven to invest here more by logic than by magic."

Intrawest has been co-operating with outside real estate agents since it launched the project, and Lafave estimates that 20 per cent of sales come from outside Realtors. She says real estate professionals tap into markets that her on-site staff of six has difficulty reaching, such as Chinese-Canadian investors.

"If a Realtor has worked with a client on their primary residence, chances are that same client will someday be looking at resort properties as well," says Lafave. The Village at Blue Mountain provides an exclusive website for real estate agents with downloadable marketing materials, an e-mail generator and a client referral tool. Realtors provide the lead to the in-house licensed staff at Blue Mountain, and receive three per cent commission for the sale.

Intrawest properties are sold through a "priority reservation program," in which customers reserve appointments in advance and then are given the opportunity to pre-purchase a condo on a specific day.

The next offering at Blue Mountain is Phase II of Mosaic at Blue, consisting of 81 suites in a boutique condominium hotel. The project offers townhomes with a private entrance and a private courtyard, along with interior access to a full-service spa, a year-round outdoor pool and a private lounge. Prices start in the low $200,000s, ranging from $453 to $540 per square foot.

The driving force behind the sales is investment-based, but Lafave says purchasers need to realize that the units can't be "flipped" in a short time to earn a fast buck. She says that although some of the people who purchased homes early in the project have done well, most investors should be prepared to hold their properties while the development grows.

While the company's main focus is on selling the newest developments, it also deals in resales. Potential buyers of these suites can see how much the unit has made in rental income since it became occupied. Lafave says that while most of the resales in the development are listed by outside real estate agents, most of the sales are made by her own group.

Intrawest estimates that by the time The Village at Blue Mountain is complete, it will cost $847.4 million. The ultimate objective, the company says, is "to provide high-end, year round facilities for 2.5 million visitors annually -- 950,000 of them overnight stays."

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Jim Adair

Jim Adair has been writing about Canadian real estate, home building and renovation issues for more than 40 years. He is the former editor of Canada’s leading trade magazine for real estate professionals, as well as several home building, décor and renovation titles. You can contact him at [email protected]

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