Alberta recreational properties see price decline

RE/MAX expects busy market this year

By Mario Toneguzzi, Calgary Herald

CALGARY — The stage is set for one of the best recreational property markets in years, says real estate firm RE/MAX in its latest report released Monday. Greater affordability, increased selection and pent-up demand are key factors this year, according to the 2011 RE/MAX Recreational Property Report, which examined sales and trends in 46 markets across the country. Price reductions are luring potential buyers back into the market, it said.
Elton Ash, regional executive vice-president of RE/MAX of Western Canada, said prices are down much as 20 per cent from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers. “The strengthening oil sector has also brought Albertans back into the mix, driving demand for both local and coastal B.C. properties. 2011 could be the turning point,” he said. According to the report, the starting prices for recreational properties in Sylvan Lake and Canmore have dropped significantly. In Sylvan Lake, the starting price for a three-bedroom winterized recreational property on a standard waterfront lot has fallen to $800,000 this year from $1.2 million in 2010 while the starting price for a two-bedroom condominium townhouse in Canmore has dropped to $229,000 this year from $270,000 in 2010.
“Oil and gas executives with young families, from Calgary and Edmonton, are fuelling demand for recreational properties in Sylvan Lake,” said the report. “Interest has been strongest for waterfront product at the entry-level price points. Despite some softening in values, affordability is still an issue in the area and buyers continue to compromise.”
Carl Stepp, with RE/MAX Real Estate Central Alberta, said sales are on track with last year in Sylvan Lake.
“For the last two years, we’ve been kind of just moving along at the same pace,” he said. “The strong Canadian dollar and people spending it down south is hurting our market a lot I would think. “I guess the people that we attract these days are probably the 30-to-45-year-old with two kids under 15 that want to be able to drive an hour from the city and be at their cabin and be in their boat in an hour after work . . . They don’t want to be driving seven hours to the Shuswap. Jumping on a plane and going to Phoenix or Palm Springs every weekend doesn’t work for them either.”
Stepp said there have been three sales over the $1-million mark this spring on the lake. The most expensive listing sold to date was $1.25 million.
In Canmore, 86 recreational properties have sold to date this year, considerably off last year’s pace of 120, said the report.

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“An oversupply of new condominium units, built before the recession, has contributed to the lack-lustre performance,” it said. “As these surplus units are sold, the market is expected to stabilize. Overall demand is on the upswing among all types of buyers, especially those at the lowest and highest price points.
“Local and provincial purchasers account for the majority of sales as the rising Canadian dollar has affected U.S. buyers.”
Jessica Stoner, with RE/MAX Alpine Realty, said the recession has had an impact on the Canmore real estate market.
“We are still in a correction mode in Canmore,” said Stoner. “Most of Western Canada, the cities, recovered very quickly and went well on their way. But the recreation areas we’re taking much longer to correct. Prices to start with.
“(Also) affecting us, of course, is the global financial situation. We don’t have the international buyers we used to. So we don’t have the U.S. and U.K. buyers which used to be fairly prominent buyers.”
The most expensive property sold this year in Canmore was a freestanding home in Silvertip Golf Resort for $2.45 million.

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