Jun 13, 2011, Alberta recreational properties see price decline

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 mix, driving demand for both local and coastal B.C. properties. 2011 could be the turning point.”

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.”

In Canmore, 86 recreational properties have sold to date this year, considerably off last year’s pace of 120, said the report.

“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.”

By Mario Toneguzzi