Recent stats show that the close-to-Edmonton recreational property market – from west of Stony Plain to the Pembina River and from Lake Wabamun to Isle Lake and Lac Ste Anne – is somewhere between stable, strong and hot.
Some reasons are pandemic and post-pandemic bumps of interest in being outdoors, the power of Wi-Fi and working from remote locations, inflation, the economy, benchmark prices and spiked mortgage rates, high demand and low supply.
According to national trends and numbers in the late-2023 Royal LePage (RLP) Winter Recreational Property Report, 24 per cent of RLP experts reported a decline in buyer demand, mostly due to climate factors or environmental disasters after an unprecedented wildfire season. However, more than 40 per cent reported an increase in inventory, as a direct result of rising interest rates.
Close to home, Edmonton recreational property specialists Charlene Anderson and Kelvin VanDasselaar at ReMax Edmonton Lake Property point out that, while hiked mortgage rates haven’t noticeably impacted Edmonton area recreational properties, some increasing prices, particularly for lakefront properties, can be attributed to the availability of modern, updated and new homes now on the market.
The always-popular lake properties close to Edmonton include Alberta Beach, Wizard Lake, Buck Lake, Jackfish Lake, Lake Isle, Pigeon Lake, Skeleton Lake and Lake Wabamun.
“It’s really not so much about mortgage rates and spiking prices when it comes to recreational properties,” Anderson explains. “In the Edmonton vicinity, we have been more affected by regional local weather. Last year we were especially impacted by the fires. While most of our areas were not directly burnt, we were affected by smoke, road closures and the general uncertainty of what would burn next. We were also affected by the fact that we did not have a lot of rain/snowfall and saw some of our lake levels drop significantly. Despite the challenges, the market tends to rebound quickly once uncertainties clear.”
VanDasselaar notes that, while the recreational market is not dramatically changing either up or down, it may be shifting.
“We aren’t seeing a huge increase in buyers coming to Lake Country,” he says, “but we’re noticing that it may no longer be as much of a seasonal business. Sales have definitely been brisk through the non-traditional recreational property market months, like November to April.”
According to 2023 stats, Lake Wabamun had 12 lakefront sales at a median sales price of $954,000 and 13 off-lake sales with a median sales price of $325,000. Since the pandemic, the Lake Wabamun market has been consistent and steady.
Last year, Lake Isle had 10 lakefront sales at a median sales price of $447,500 and 40 off-lake sales (seven raw land) with a median sales price of $209,000. Lac Ste. Anne had 13 lakefront sales at a median sale price of $545,000 and 47 off-lake (11 land sales) with a median sales price of $270,000.
Tom Shearer, broker/owner of Edmonton’s Royal LePage Noralta Real Estate notes that waterfront property has particularly increased in value since 2019.
“Pigeon Lake, for example, went from $603,963 to $620,099, likely due to brisk activity with a fair amount of turnover of more properties and some owners coming from places further away, like Calgary.
“The trending shows that last year, two things may have slowed Edmonton’s recreational market. First, as COVID travel fears subsided, people felt more comfortable traveling overseas or further away. Also, increased values and higher mortgage rates pulled some buying power away from second homeowners.”
From much experience, he adds that one of the biggest things holding recreational property sales back is the lack of overall supply.
“There just isn’t that much that comes to the market or what gets turned over. In many popular recreational property areas, it could take years for the right property to come along.”
The sales and listing stats and trends are testimonials to the continued popularity of recreational properties, for lifestyle as well as investment, although there seems to be a generational shift about how the trends may be shifting.
Statistics Canada highlighted the fact that the Canadian population is changing, due to Baby Boomers getting older and immigration boosting numbers in the younger generations. The changes are translating into shifts in the labour market, services to seniors, the consumption of goods and services, as well as housing and investing in recreational properties.
For the first time since the end of the Baby Boom, Baby Boomers—who were born between 1946 and 1965 – now make up less than a quarter of Canada’s population. In most aspects of Canadian life, it’s Gen X’s turn.
Last year’s ReMax Cottage Trends Report showed that Gen X’s (43-58) are driving demand in 91 per cent of surveyed recreational property markets. More than 51 per cent of Canadians who owned recreational property were motivated by the chance to pass their real estate assets down to children or other family members.
Some things never change. Seasoned Realtors and financial planners caution that a recreational property is a big responsibility, about mortgages, maintenance and extra taxes. They also emphasize that a recreational property is almost always an emotional purchase for family enjoyment, not investment value.
Unlike primary properties and other investments, recreational properties should be considered as long-term investments.
Realtors and financial advisors urge defining goals about recreational property investing. Will it be for personal and family relaxation? Or for rental revenue to cover costs?
Overall, the recreational property market is known for its potential to appreciate in value over time. Anderson emphasizes that recreational properties usually offer solid returns for sellers and the market has shown steady growth since 2012, making it a reliable long-term investment option.
As spring 2024 begins, what’s ahead for close-to-Edmonton recreational properties? Shearer foresees a strong market that will hold its value and cautions that the market may not see the same kind of activity as with Edmonton’s multi-family real estate.
Anderson is optimistic that, “So far this year we have been busier than normal in comparison to years past, partially due to the mild winter and because lake sales are directly impacted by weather. It’s early but 2024 looks to be great, if not better than last year; although there is a possibility that we could be impacted by the low snow and rainfall causing more local fires.”
Source: https://businessinedmonton.com/featured/the-2024-close-to-edmonton-market/
