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The Recreational Property Supply-Demand Dilemma
THE RECREATIONAL PROPERTY SUPPLY-DEMAND
CHRONIC LOW DILEMMA SUPPLY AND GROWING DEMAND
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BY JOHN HARDY
Asubtle but significant side effect of the past two years of Calgary business disruptions is redefined perspectives and attitudes about recreational properties.
From Sylvan Lake to Canmore and areas beyond, recreational properties were once sought after as not-far-from-Calgary outlets for lake fun, nature walks, the wail of loons, kayaking, S’mores and campfires and relaxing family good times. Post-social distancing, recreational properties are all that and more. Much more.
For many people, especially Calgarians, managing the lockdowns accelerated the remote work and work-from-home (WFH) trends, and underscored the tempting format of working from anywhere, including cottages and cabins.
According to Phil Soper, president and CEO, Royal LePage, “While the harshest of the pandemic-related restrictions may be behind us, and Canadians are starting to resume normal activities once again, some things will remain forever changed. The way we view our homes, and our connection to community and nature have shifted. The desire for homes with more space, both indoors and out, is a trend that I believe will long outlive the pandemic.”
The 2022 Royal LePage Recreation Property Report shows that the price and demand for recreational properties in
Alberta continues to grow, especially in regions that are easily accessible from Calgary. The numbers track that, in 2021, the price of Alberta recreational properties such as cabins and trailers climbed by a whopping 31.5 per cent from the previous year. And now, according to the Report, they will be increasing by another nine per cent.
The forecast average Canadian recreational house price is $640,710, although the Royal LePage stats indicate that recreational properties in Alberta already cost significantly more than other areas of Canada, at a forecast average of $1,170,660. British Columbia’s recreational property prices come in second to Alberta’s, with a predicted average cost of $1,029,280.
Recreational properties within a reasonable drive from Calgary also have a dilemma common to most real estate markets in general.
“The factors challenging Canada’s residential real estate market – chronic low supply and growing demand – are amplified in the recreational property segment,” Soper points out. “Demand for recreational properties continues to vastly outstrip inventory in many cottage regions across the country, including Alberta. Waterfront and mountain-top locations near cities are limited by nature, even in a vast land like Canada, forcing buyers into multiple-offer scenarios. Even more than in urban regions, it is vital that buyers and sellers employ the services of a local agent who has recreational market expertise.”
According to a Royal LePage survey of recreational property experts, 57 per cent of respondents in Alberta reported significantly less inventory this year, compared to last year. The aggregate price of a single-family home in Alberta’s recreational regions is forecast to increase 9.0 per cent in 2022 to $1,170,660. In 2021, the aggregate price of a single-family home in the province’s recreational market increased 31.5 per cent year-over-year to $1,074,000, compared to 2020. Last year’s Royal LePage Boomer Survey noted that 41 per cent of Boomers in Alberta said they were considering purchasing a primary residence within the next five years. Of them, 55 per cent said they were considering buying in a rural or recreational region, which could result in up to approximately 207,000 people having entered the recreational real estate market within the five-year period.
Realtors and recreational property experts suggest that, in some undeniable but unexpected ways, managing the past two years of work disruptions and lockdowns have impacted the perspectives about real estate in-general and particularly recreational properties. Working by remote and the work-from-home (WFH) phenomenon is increasingly more common. The undeniable reality is that the past two years of coping with various pandemic broadsides have impacted lifestyles.
“Many Albertans, especially those with the option to continue working remotely, are prioritizing their desired lifestyle when considering where they want to live,” he notes. “Alberta’s recreational regions offer greater access to nature and, as a secondary property, can be a good investment if used as a rental home, even in part.”
For Calgarians, whether it’s north to Sylvan Lake and beyond or west to the Banff and Canmore recreational property areas, demand heavily outweighs supply. As a large and highly-sought-after recreational destination, Canmore’s real estate market has a significant impact on the median price of a singlefamily home in Alberta, with its proximity to Banff National Park and luxury mountain properties.
“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,” notes Brad Hawker, associate broker, Royal LePage Solutions in Canmore. “The region attracts mainly buyers planning for retirement. With less than one month of inventory currently available and very little in the way of new development on the horizon, I expect the market to continue very competitive for buyer hopefuls, which will put more upward pressure on prices.”
There’s no doubt that the popular Canmore area is a pricey example of recreational properties. Hawker cites stats that the median sale price of Canmore townhouse condos is $1.225 million and detached is $1.7 million.
“Calgary is a strong part of the Canmore market,” he points out. “It’s easy access from Calgary and there has also been a noticeable pick up from Ontario and the Prairies. We have been starved for listings for the past two years and even though the inventory grows seasonally, it’s still dramatically below pre-COVID listings.”
As a subtle trend, there’s undeniable reality that the past two years of coping with various pandemic broadsides have impacted lifestyles and altered the appeal of recreational properties.
“While the harshest of the pandemic-related restrictions may be behind us, and Canadians are starting to resume normal activities once again, some things will
remain forever changed,” Soper adds. “The way we view our homes, and our connection to community and nature have shifted. The desire for homes with more space, both indoors and out, is a trend that I believe will long outlive the pandemic.”
Hawker agrees. “We’ve seen an acceleration of boomers looking to retire. It has been magnified by the ability to work by remote. I don’t see any slowing in the trend. It has put pressure on the supply for quite some time. The recreational property market is, of course, still driven by boomers but more and more 30- to 50-somethings are getting interested.
“Likely due to COVID lockdowns and making decisions about their lifestyles, moving out of the city to less populated areas allows them to option not to have to be in the city for 20-plus years. As a result, in addition to Canmore, some recreation property areas have grown a lot. Like Dead Man’s Flats, Lac des Arc, Harvey Heights and Exshaw.”
While the work-from-remote flexibility is luring a whole new demographic to the option of recreational properties, Soper explains that: “There’s still a strong demand for recreational properties from buyers nearing retirement. With remote work options, Canadians are transitioning into their final working years while getting to know their new community.” Family Owned, Local Business Serving Albertans SINCE 1978
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