The price and demand for a cabin or another recreational property in Alberta continues to grow, especially in regions that are easily accessible from Edmonton and Calgary.
A new report from Royal LePage is predicting a 6% rise in the price of recreational houses in Alberta in 2021, bringing the average price up to $942,881. This comes after a larger increase of 9.5% in 2020, with the average price of Alberta cabin at $889,510.
According to the report, Canmore has the largest impact on the median price of a single-family home as a recreational property in Alberta. This is due to its proximity to Banff National Park.
Alberta’s expected increase is much lower than the projected national average of 15%, which brings the forecasted average Canadian recreational house price to $502,730.
While the expected increase is lower than the national average, recreational properties in Alberta already cost significantly more than other areas of Canada. This is seconded by British Columbia at a predicted selling price of $781,918, compared to average Alberta cabin price of $942,881.
This is likely due to luxury mountain properties and the demand for recreational homes in the Rockies, especially as the work from home trend continues.
The Royal LePage 2021 Demographic Survey found that 32% of Albertans aged 25 to 35 say that the pandemic has increased their desire to move to a less dense area, and 60% say it is important to work for an employer that allows them to work remotely.
“Canmore is seeing unparalleled demand from people wanting to accelerate their life plans and focus on their physical and mental health,” said Brad Hawker, managing broker, Royal LePage Rocky Mountain Realty.
“We’ve seen 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.”
Inter-provincial buyers are another factor in rising property prices, especially as the option for traveling abroad has been largely taken away due to the pandemic.
According to a Royal LePage survey of recreational property experts, 44% of Albertan respondents reported an increase in the number of buyers from other provinces, compared to previous years.
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As demand from both Albertans and out of province buyers continues to grow, experts say that 78% of recreational markets have seen a decline in inventory compared to what is typical for their respective regions.
“There simply is not enough inventory to satisfy the growing demand in this area,” said Tom Shearer, broker, Royal LePage Noralta Real Estate.
“Wabamun Lake and Lac St. Anne are reasonably affordable recreational regions, and the short commute from the city makes these areas attractive to those looking to escape the urban centres. I expect the spring market to be a challenge for buyers, due to a lack of supply.”
In many areas of the province, a shortage of recreational property options are sending buyers into multiple-offer situations. This often results in properties selling above the asking price, creating a seller’s market.
“The low inventory, high demand scenario that is defining Canada’s current real estate landscape can be frustrating for buyers and their agents,” said Phil Soper, president and CEO, Royal LePage. “Without enough supply to meet demand, prices continue to increase at above normal rates.”
“With so few listings to choose from, owners are concerned they will have nowhere to go if they sell before buying, so they hesitate to list. This cycle makes it difficult for anyone to move ahead.”
With the increase in recreational property prices being largely due to the current work from home scenarios that many are facing right now, it will be interesting to see whether this trend continues as we move out of the pandemic.