Powell River

Lending in Powell River

Powell River is a market in transition, and anyone telling you otherwise is selling something. The single-industry mill town narrative is over. The paper mill, the economic engine for a century, was permanently curtailed in 2023, and the Tla’amin Nation’s recent agreement to reclaim a significant portion of that land marks a fundamental shift in the community’s trajectory. We see this as a long-term positive, but it introduces short-term uncertainty that requires a conservative lending approach.

What’s left is a coastal community with solid, tangible assets that attract a specific kind of buyer. Powell River became a prime destination for the “pandemic pivot”—people cashing out of the Lower Mainland for a quieter, more affordable lifestyle. This influx isn’t just anecdotal; census data shows the population grew 6% in just five years, driven largely by these newcomers. This external capital supports property values in a way the local economy can’t. The desirability here is real. You’ve got the ocean at your doorstep, a mild Zone 8a climate that feels more like the Island than the mainland, and a distinct cultural identity anchored by things like the Historic Townsite and the Patricia Theatre. These aren’t just brochure features; they create a durable sense of place that protects resale value.

Still, we can’t ignore the numbers. The local employment rate is under 50%, unemployment sits at 7.7%, and the median household income is $67,000. The demographics also tell a story: the median age is over 53, and seniors make up almost a third of the population. While this creates a stable community, it also means the economy, now led by healthcare and retail, doesn’t have the high-wage jobs the mill once did. This isn’t a market for pushing leverage or financing speculative projects based on a job letter from a new startup. Our underwriting assumes a worst-case scenario where a property needs to be sold, and the buyer pool will be a mix of local wage earners and retirees or remote workers from outside the region.

That’s why we cap our exposure in Powell River at 65.0% LTV. We’re comfortable here because the underlying collateral is strong. The housing stock is predominantly single-detached homes (over 72%), which are straightforward to value and liquidate if necessary. With very few condos or row houses, the market is refreshingly simple and not exposed to the risks of over-supply from large multi-family developments. We see good potential for deals involving bridge financing for down-sizers, equity take-outs for renovations, and mortgages for buyers with solid credit who don’t quite fit the banks’ narrow criteria.

Powell River has strong bones and an undeniable lifestyle appeal. It’s a good fit for our fund, provided the deal is structured with sufficient equity to insulate against the risks of a local economy finding its new footing.