The aggregate price for a single-family home in recreational regions of Alberta is forecast to jump significantly this year, eclipsing the $1.1 million mark, according to a new report.
Royal LePage’s 2022 Spring Recreational Property Report predicts aggregate prices for recreational properties will jump nine per cent this year in Alberta over last, buoyed by high demand in areas like Canmore.
The prediction comes on the heels of a massive 31.5 per cent price jump in Alberta recreational properties from 2019 to 2020.
A survey of recreational property experts for the report also found that 57 per cent of the experts have significantly less inventory than in 2021 and that trend is expected to continue as the Rockies draw interest from out-of-province.
“Strong demand continues to be driven by buyers from Western Canada, although we’ve seen an uptick in interest from Ontario and Quebec residents over the last two years. The region mainly attracts buyers planning for retirement,” said Brad Hawker, managing broker, Royal LePage Rocky Mountain Realty.
“With less than one month of inventory currently available and very little in the way of new development on the horizon, I expect the spring market will once again be very competitive for buyer hopefuls, which will put more upward pressure on prices.”
A 2021 Royal LePage survey of ‘boomers’ in Alberta found that 41 per cent of the age group were considering buying a primary residence property in the next five years, and 55 per cent of those were considering buying in a rural or recreational area.
Portfolio manager and senior wealth advisor for CIBC Wood-Gundy, David Popowich, notes that the last two years in particular have been tough for those looking at recreational homes out of the country, which have prompted buyers to look closer to home.
“I think has driven a lot of interest or at least it has forced people to start rethinking what their lifestyle might look like in retirement,” he said.
“We have certainly seen the value of recreational properties all over this country go up as the pandemic lockdowns have forced more and more people to stay domestically but again, they want a bit of a break from the monotony of their own surroundings.”
A new report from RBC found that the average Canadian family has to dedicate almost 50 per cent of their household income pre-tax to support the cost of a house.
In places like Vancouver, that number shoots up to 74 per cent of total pre tax income, but in Calgary things are a bit affordable at 26 per cent.
Keith Uthe, mortgage broker with Mortgage Alliance adds that buying a recreational property is a lifestyle question, but work from home orders could have played a part in escalating the surge in demand for these types of properties.
“Some people are deciding that they’re going to spend more time locally rather than taking planes or traveling overseas, so they’re putting their money into our country rather than maybe somewhere else,” he said.
“You’ve also got people from out of province who are looking and saying ‘that’s way more affordable’ than me buying something as an investment or as a place to live in BC or Ontario.”
Uthe adds that investors are also seeking out Canmore because of the ability to generate revenue from AirBnB or other type of rental living arrangements.