Same as the rest of the country, Alberta isn’t exempt from Canada’s rising recreational property prices, says Royal LePage’s Recreational Property report. Alberta’s average price will continue to go up in 2022 at a nine per cent clip to an average of $1,170,660. Average prices in Alberta had already soared in 2021 by 31.5 per cent to $1,074,000.
Waterfront property isn’t as widely available in the western provinces. Instead, its ski chalets and mountain retreats that are driving up the price. “All properties have been selling extremely well,” says Brad Hawker, the associate broker with Royal LePage Solutions in Canmore, Alta. “It’s not limited to one segment or another.”
Year-over-year increase of recreational property price in Alberta in 2021
When it comes to Alberta, most of the province’s recreational property market is clustered around Edmonton, at least in terms of waterfront properties. Lac Ste. Anne saw the largest recreational property price increase, rising 44.2 per cent from $416,000 to $600,000; Pigeon Lake rose 20.4 per cent from $565,000 to $680,000; and Wabamun Lake rose 16.7 per cent from $762,000 to $889,000. In terms of non-waterfront properties, Canmore had the biggest jump, rising 32.7 per cent from $1,025,000 to $1,360,000.
Who are the buyers?
Canmore broker Brad Hawker has been selling properties in the Canmore area for 30 years. Twenty-eight of those years he’s sold to the same demographic: young people looking for a welcoming community where they can raise a family. Most often, they’re from Western Canada and are also looking for a recreational location. But in the last two years, he’s started to get a lot more interest from Ontario and Quebec retirees.
“A lot of their kids have relocated to Alberta. So, when they look to retire, where do they want to be? Close to their kids and grandkids. Edmonton and Calgary would be nice, but they also want to be active.” he says. “They want to come out to the mountains and ski and hike and mountain bike. That’s been a big part of our market.”
Similar to the rest of the country, Hawker adds that Canmore has also seen its share of millennial families who now work remotely and are looking to get away from the city.
Whereas Alberta’s lake district tends to be popular with Edmonton residents due to its proximity. “Since pandemic restrictions have limited Canadians’ ability to travel abroad, that demand has skyrocketed. Line-ups at boat launches and campgrounds are longer than ever,” says Tom Shearer, a Royal LePage broker with Noralta Real Estate, in the company’s report.
What’s selling and what isn’t?
The short answer is that everything’s selling. This includes waterfront cottages around Alberta’s lakes, as well as mountain retreats in Canmore. However, Canmore tends to be a unique situation. Similar to the rest of Canada, the area is seeing low inventory rates, but this is exacerbated by Canmore’s geography.
“We have very limited inventory, very limited construction, and very limited approval for new projects,” Hawker says, “so, we’re not even getting any relief on the supply side.”
Canmore is located in a valley between two mountain ranges. Both slopes of the mountain ranges have strict no-building policies, the area being used as a wildlife corridor to let animals pass unhindered. To the west, the town has Banff National Park, and to the east is Bow Valley Provincial Park.
“Getting a new land area approved for development takes an extremely long time because of the environmental side of things,” Hawker says. He predicts that within the next 15 years, all of Canmore’s available land will be developed.
Future predictions for Alberta real estate
Both waterfront property and chalet prices are expected to remain high in 2022. “Strong demand for waterfront properties continues to put upward pressure on prices in the region, and I don’t expect there will be any relief this spring,” Shearer said.
The same can be said for Canmore. In 2021, the town saw a record year in real estate sales, but despite the soaring prices, Hawker says he doesn’t expect them to keep rising at the same rate. In fact, he’s already seeing some levelling off. “You can’t keep having record year after record year of sales volume.” Already the first quarter of 2022 has been slower than 2021. Keep in mind, that 2022 sales volume is still 64 per cent higher than the first quarters of the four years preceding the pandemic.
As for what could be causing the levelling off, Hawker points to rising interest rates on mortgages. He expects the rates to start easing back to pre-pandemic levels. And if the pandemic causes a recession, people might not be able to afford their mortgages, making more properties available.
Regardless, Hawker expects that the lack of available land in Canmore will keep supply low, meaning that for the time being, demand will stay high, keeping prices competitive.