There’s no doubt about it, and the numbers don’t lie. Recreational properties, particularly within a reasonable commute from Calgary, are booming! The prices are spiking, mostly because demand is way up and availability is often limited. But it’s good news for buyers, sellers, builders and realtors.
Some real estate insiders credit evolving consumer and lifestyle trends. Others caution that the hot market popularity is, to a large part, COVID-consequence driven and it won’t last.
Short-lived or long term, the sudden popularity of recreational properties is undeniably impacted by the lifestyle adjustments and other changes triggered by the pandemic.
“Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada,” says Phil Soper, Royal LePage president and CEO. “In many cases, younger buyers – those between 25 and 35 – are making up an increasing share of buyers trading in the big city for country life, with nearly half of buyers in that demographic (47 per cent) saying they would choose a small town or rural living.
“Various recent surveys and reports show that affordability remains the top buying criteria for 41 per cent of Canadians who are in the market for a recreational property, followed by proximity to water or waterfront, amenities and the vital contemporary lifestyle factor of good WiFi.”
Soper adds that, given the world-class beauty found in many of the “cottage country” regions throughout Canada, not to mention pandemic-related concerns about high-density living, many are thinking about expanding their families and want their kids to grow up with a little more space to roam.
From coast to coast, the line between primary residence and recreational property is blurring. “The trend began last summer when, due to COVID, the option of traveling abroad was taken away, and continued to gain popularity as it became clear that with office lockdowns, access to high-speed internet was invaluable and many people could do their jobs from just about anywhere,” he says.
According to the most recent Royal LePage Recreational Property Report, which tracks insights, data and forecasts from 51 Canadian markets, 32 per cent of Albertans aged 25 to 35 say the pandemic has increased their desire to move to a less dense area and another 60 per cent said it’s important to work for an employer that would allow them to work remotely.
“According to our research, access to high-speed internet and the ability to work remotely are among the top criteria for those seeking properties in Canada’s recreational regions, followed closely by four-season usability,” Soper adds.
Similar to conventional, urban real estate, price is not only a factor but a barometer of market trends. “The pandemic has resulted in increased demand for recreational properties. In a segment of the market that has historically low inventory, this has continued to put upward pressure on prices while inventory continues low,” explains the personable Brad Hawker, associate broker of Royal LePage Rocky Mountain Realty.
He notes that waterfront properties and access to water remain a top priority for buyers and because there is a limited amount of waterfront land available, waterfront or near-waterfront properties remain in high demand. “The pandemic has driven a desire for all things outdoors,” Hawker says. “There is low availability for campsites, resorts. People want to get away from the stress of city-life and enjoy the cottage lifestyle. Cottages bring families together.
As it shows in the LePage Report, this year the aggregate price of a house in Alberta’s recreational regions is forecast to increase six per cent, to $942,881. Last year, the aggregate price of a house in the province’s recreational markets increased 9.5 per cent year-over-year to $889,510, compared to 2019.”
A sign of the times and surprising as it may be for some, the Report stats also show that the most important consideration when purchasing a recreational property, “which some buyers overlook or take for granted,” Hawker says, “is cell phone reception and internet speed. One-third of national respondents said checking the quality of cell phone reception and internet connection, both inside the cottage and around the property, is a key consideration for first-time recreational property buyers.
“As more employers confirm a hybrid work-from-home policy, new buyers are gaining the confidence to purchase a recreational property where they can work from but can still make it into the office a couple days a week,” he says.
Recreational properties within a reasonable distance to Calgary – like Canmore and Sylvan Lake, and for Edmonton, Lac St. Anne and Wabamun Lake are popular options. The Central Alberta region (areas like Sylvan Lake, Gull Lake, Glennifer, Nordegg, Buck Lake and Buffalo Lake) are recreational property hot spots, particularly for Calgarians and, according to Lindsay Olver, owner and broker at Coldwell Banker Ontrack Realty and chair of CARA (the Central Alberta REALTORS® Association), “Depending on the recreational property, there have been price increases from 20 per cent to double if not triple the price it was in 2019.
“The main factors driving the increase in Central Alberta recreational properties are low interest rates, the disruption in office routines caused by the pandemic and the fact that travelling this year was ground to a halt. The buyers who normally would go south for the winter or travel in the summer were unable to so they bought locally. The ability to work remote has also given people more freedom to move and work from a location that they desire.”
When it comes to recreational property reputation and popularity, there is agreement that Canmore in a league of its own. “Canmore is seeing unparalleled demand from people wanting to accelerate their life plans and focus on their physical and mental health,” Brad Hawker says. “A growing segment of young and middle-aged buyers seeking primary residences in the area. If they can work remotely from anywhere, they want to live in a place that caters to their active and adventurous lifestyles.”
Recreational property professionals acknowledge that the sudden shift in buyer momentum has inflated the prices of some in-demand and high-end recreational properties. Earlier this year, one Canmore property sold for $4.2 million and by comparison, although out of range for a Calgary commute, current numbers show
that while the market is sizzling in Canmore, it is not a unique situation. In Whistler, the iconic mountain town outside of Vancouver with a similar population to Canmore, has experienced a 29 per cent price increase since 2019 for chalets and a 34 per cent increase in duplexes and townhouses.
The Royal LePage Report tracks that 44 per cent of realtor respondents in Alberta reported an increase in the number of buyers from other provinces, compared to previous years.
Demand and prices continue to grow in recreational regions easily accessible from Edmonton and Calgary. The Alberta summary says 78 per cent of recreational markets have had a decline in inventory compared to what is typical for their areas.
“The market has started to slow down compared to earlier on in this year,” CARA’s Lindsay Olver says. “It’s tough to tell what may happen next year. Recreational properties will likely cool down going into 2022, especially if the travel restrictions lift.”
As inventory sags, the clutch of COVID disruptions slow down, offices return to routine or a hybrid routine, and the new normal lifestyles set in, some recreational property professionals suggest the market will stabilize, if it hasn’t already begun to cool.