Prices for Alberta recreational properties have soared by up to 31 per cent as demand for lakefront cottages and Rocky Mountain chalets continues to outpace supply, according to Royal LePage.
In a new study released Thursday, Royal LePage Real Estate Services said a standard land access waterfront property in Sylvan Lake is now priced as high as $550,000, a 30.9 per cent increase from $420,000 in 2002.
In Canmore, a standard chalet now sells for $320,000, a 28 per cent hike from $250,000 last year.
"It's a very hot market. There are multiple offer situations happening quite regularly," said Brad Hawker, broker-owner of Royal LePage Rocky Mountain Realty Ltd. in Canmore.
"We've got more demand than there is supply. So it's a seller's market and we don't see any sign of that changing at all."
Last week, a property new to the Canmore market attracted four offers the day of the showing and was conditionally sold for more than the asking price, Hawker said.
The demand for Canmore properties is broad, ranging from recreational and weekend users to people making lifestyle choices. Some buyers have abandoned their dream of owning both a city home and a country home, and are opting for a resort property.
"They either can't afford both of them, or don't want to have the maintenance of both of them, or they realize that with technology being the way that it is, they don't necessarily need to be in the city anymore," Hawker said.
"There are a lot more consulting type positions where people might only go into Calgary or Edmonton four or five times a month."
Lower interest rates and the beleaguered stock market are other factors fuelling the recreational market, he said. Condominium prices have risen to $165,000 from $145,000 in 2002. One Canmore developer said interest in recreational properties has surged in the last six to eight months. "Not only from the local markets in Alberta, but also from the international markets as we become known by them, mainly the United Kingdom and the United States," said Bill Heidt, president and chief operating officer of Three Sisters Mountain Village Ltd.
"That has driven up the level of activity we're involved with presently out in Canmore and there is no doubt values are rising at a rate faster than what we had anticipated for a development.
Lot prices have skyrocketed since early 2002, Heidt said. Prices in the Three Sisters development range from about $170,000 for an apartment-style condo and between $300,000 and $400,000 for a townhouse to between $500,000 and $600,000-plus for a duplex and from $600,000 to a million-dollars-plus for a single-family home.
In Sylvan Lake, a standard land-access waterfront property is now priced at $399,000 to $550,000, compared with $375,000 to $420,000 in 2002.
A land-access back lot property ranges from $150,000 to $300,000 in 2003 compared with between $120,000 and $260,000 last year.
Demand for Sylvan Lake properties escalated last spring following a newspaper report about the town's explosive population growth and tripling of building permits.
"It did create an almost instantaneous interest in the community from an investment point of view for cottages and revenue properties," said David Stinson, broker/owner of Royal LePage Endeavour in Sylvan Lake.
"But it also was a double-edged sword because what we saw was to some extent a superficial price increase. We were going up anyways but they went up quite a bit more."
Sylvan Lake's proximity to Red Deer and inter-provincial migration to central Alberta helped boost interest in town properties, Stinson said.
Royal LePage said tight market conditions are driving recreational property prices upwards in many parts of Canada. The study notes that within the next three years, six per cent of Canadians are likely to purchase a cottage-recreational property.
"In 2003, there will be four Canadians seeking recreational properties to every one cottage owner who plans on selling and this scarcity of supply continues to exert pressure on property prices across the country," said
Sherry Chris, executive vice president, network services, for Royal LePage.
(c) Copyright 2003 Calgary Herald