As developer of Shelter Bay, I’m often asked what happens to home values as the remaining lease term declines. I can best answer that question by looking at the values in three projects that our company has developed.
We developed our first residential community on First Nations land in 2004: Halcyon Meadows, 224 detached homes in Chilliwack. This was on a 99-year prepaid lease, of which there are now approximately 81 years remaining. Since 2005 the average home value has increased by 228%.
Our second residential community on First Nations land, Clover Creek in Chilliwack, was built in 2007. There are currently approximately 70 years remaining on the lease. Since 2011 the average home value has increased by 137%.
We are nearing completion on a 285-home development on First Nations land, The Cottages on Osoyoos Lake. There are approximately 88 years left on the lease. Recent sales show that values have doubled since 2014.
As you can see from the above examples, values on leased land tend to track with the values on freehold land. As the price of freehold homes increase you can expect leasehold lands to increase as well.
Eric Van Maren
Co-managing partner Shelter Bay Partnership