Industry reports paint positive picture for Alberta recreational property market in 2018
Two major reports on the Canadian recreational property market are forecasting a healthy market across the country and growing demand within the province of Alberta for the rest of 2018.
Royal LePage’s annual survey of their recreational property specialists predicts an average price increase of 5.8 per cent for the country as a whole, but varied results in British Columbia and Alberta because of new speculation taxes in B.C.
Average prices in Alberta are forecast to climb 10.4 per cent in 2018, while prices in B.C. are set to decline by 2.8 per cent.
“Driven by the nation’s economy, Canada’s recreation real estate market is set to experience another strong year,” said Phil Soper, president and CEO of Royal LePage, in a press release. “The search for that perfect summer getaway continues unabated.”
“A large number of retirees are, in essence, cashing in – selling those Sun Belt properties and then reinvesting in Alberta recreational property.” – Elton Ash, RE/MAX Western Canada regional executive vice-president
But Soper says that new taxes in B.C., aimed at recreational property owners and touted as a solution to speculators and foreign investors, will cause Albertans to increasingly look within their own province for vacation properties.
“International purchasers make up a very small portion of the recreational market, and the dreaded ‘house flippers’ are an urban phenomenon,” he said.
The Royal LePage report also noted that compared to B.C., Alberta does not have as many recreation properties, so prices will be at a premium as more Albertans look to buy in their home province.
RE/MAX’s 2018 Recreational Property Report says retirees will be driving demand for vacation properties in 91 per cent of the markets across Canada in 2018, compared with 55 per cent last year.
Elton Ash, regional executive vice president of RE/MAX Western Canada, says a trend that is expected to continue this year is Albertans who bought Sun Belt properties in California and Arizona selling and looking to buy recreational property back home.
Ash says Albertans who bought in the U.S. when prices were at a low during the recession have seen their properties rise in value and out-of-country insurance costs climb as they’ve aged, so they are deciding now is the time to sell.
“A large number of retirees are, in essence, cashing in – selling those Sun Belt properties and then reinvesting in Alberta recreational property,” he said.
Ash adds that with the Alberta economy on the upswing, people are more likely to buy a recreational property, which is a discretionary purchase.
“Consumer confidence has improved in Alberta, and so has the overall economic performance of the province,” he said. “Given that, there’s greater confidence in spending those disposal dollars for the average Albertan.”