Royal LePage released its Winter Recreational Property Report, and they’re predicting a decrease in the median price of Canada’s ski properties in 2023.
According to the real estate company, the median price of a single-family detached home in Canada’s recreational ski regions will decrease by 3 per cent over the next 12 months to $1,011,451. Rising interest rates are expected to reign in prices, although, they did little to affect things in 2022.
Royal LePage said the median price of a single-family detached home in Canada’s ski regions in 2022 increased by 15.1 per cent to $1,042,700.
“While the rapid rise in interest rates, which began in March of this year, has caused many would-be buyers in the residential market to move to the sidelines, some recreational property purchasers—most notably in higher-end markets—have demonstrated a greater tolerance to increasing monthly mortgage costs,” said Pauline Aunger, broker of record at Royal LePage Advantage Real Estate, in a statement.
Ski chalets were particularly popular among Americans who attempted to purchase recreational properties before the Canadian government implemented its two-year ban on foreign buyers, which started January 1, 2023 (despite vacation homes being exempt from the ban). According to a Royal LePage survey, 75 per cent of Americans who currently own a recreational property in Canada said that they made their purchase after the two-year foreign buyer ban was announced. Of those Americans who don’t own a recreational property in Canada, 67 per cent said the current strength of the U.S. dollar has made them more inclined to buy a home north of the border.
Despite attention from American buyers, and the increase in prices, all ski regions surveyed by Royal LePage saw a double-digit drop in sales volume.“For most Canadians, owning a recreational property is a nice-to-have lifestyle option,” Aunger said. “In the current economic environment, it is not surprising that sales have declined.”
But Aunger added that demand for recreational properties remains healthy; it’s just moderated itself compared to the sales volume seen during the pandemic boom.
B.C.’s Big White ski area, near Kelowna, saw the biggest jump in median price for a single-family detached home in 2022 with a 45.5 per cent increase to $1,600,000. Although, sales in the area dropped by 33 per cent.
“Transactions at the upper end of the market are largely responsible for the dramatic price increases in the single-family segment, as Big White continues to attract luxury recreational property buyers. However, demand has slowed over the last year as buyers adjust to the rising interest rate environment and sellers feel less urgency to list their properties,” said Andrew Braff, a sales representative at Royal LePage Kelowna, in a statement. “As activity moderates, we are seeing fewer multiple-offer scenarios compared to last year.”
In Whistler, the median price rose by 14.8 per cent to $3,648,200, with a 35 per cent drop in total sales.
In Canmore, Alta., the median price jumped 23.6 per cent to $1,588,900, but the area saw a 41 per cent drop in sales volume, trending back towards historic norms, said Brad Hawker, an associate broker at Royal LePage Solutions, in a statement.
In Ontario’s southern Georgian Bay area, which includes Collingwood, the median price increased by 11.3 per cent to $890,000, but saw a 27 per cent drop in total sales. Southern Georgian Bay is one of the few areas Royal LePage expects prices to go up in 2023, they’re predicting a five per cent increase in the median price.
Finally, in Quebec’s Mont Tremblant, the median price increased by 23.5 per cent to $500,000, with a 38.1 per cent decrease in sales. While the median price of a condo in the area increased by 44.4 per cent to $475,000, but the area saw a 47.8 per cent decrease in sales.
“The current slowdown should help shift the Tremblant housing market back to a more normal sales cycle,” said Paul Dalbec, a chartered real estate broker with Mont-Tremblant Real Estate, in a statement. “I expect that in the coming months, slope-side luxury condos worth between $700,000 and $1 million, and single-family residences valued from $400,000 to $600,000 will be most affected by the price correction, as those properties appreciated much more during the pandemic.”