Here is some history on lot sales since 2007 on Pender Island. We don't sell a huge number of lots each year. Currently the market has been very active for lot sales. There are a couple reasons why lot sales are always lower than residential sales:
1. The cost of building is significant. Some contractors quote $250/sqft for basic grade building. If someone chooses to build it is most likely because they want something specific or because they want to do some/all of the work themselves.
2. It can be less expensive to buy a home and alter it rather than build from scratch.
3. Lending rates can also be a deterrent from purchasing a lot. Some lenders require up to 50% down on the purchase price. It is more challenging for them to sell vacant land should the mortgage go into foreclosure.
4. Costs for building needs to be either cash or by loan. A loan in most cases will need to be secured in some way. In most cases the structure cannot be mortgaged until it is built and affixed to the property. Many times a building loan can come in the way of a line of credit until the building is completed.
5. The time it takes to build can be significant on Pender Island. There are many local trades here and sometimes (especially after a group of lot sales) there can be a significant wait list. People building should consider a time frame of 1 - 2 years.
The reasons that people buy lots:
1. They have a specific idea about what they want to build.
2. They can build themselves.
3. Building has always been a dream of theirs.
4.The only want to purchase land now, camp there on occasion when they come over. Perhaps dreaming about building in the future.
5. As an investment. Sitting on land for many years and hoping to make a profit.
6. It is connected to property they already own. They may be securing their privacy or controlling their view etc.