JOHN LEHMANN
The recovery in Canada's recreational property market hasn't kept pace with the broader housing sector, as fewer Americans venture north and more Canadians look south for vacation properties.
The 2010 ReMax Recreational Property Report released Thursday said that while sales increased 79 per cent year over year in the 50 markets surveyed, only 43 per cent of the regions saw price increases.
"While sales have been strong out of the gate, the number of waterfront cottages, condominiums, and back lot properties sold in the first quarter still fall short of prerecession levels," said Michael Polzler, executive vice-president for Ontario-Atlantic Canada.
ReMax, a major real estate brokerage with a sizable presence in the recreational property sector, suggested lower prices are likely to drive consumers toward properties. The report said the recreational market finds itself where the broader residential market was last year, with would-be buyers who sat out the recession beginning to take an interest once again.
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However, economists have warned higher mortgage rates and stricter mortgage qualification rules could put pressure on many homeowners who took on too much debt to buy their primary properties. Any slowdown in the residential market would have an impact on the recreational sector.
The biggest drag on prices has been a lack of American buyers, ReMax said, as a higher dollar and high U.S. unemployment deter would-be property owners from venturing north.
"Americans have virtually fallen off the map in Canadian recreational properties," ReMax said. "Only Shediac Bay, where recreational property values are a fraction of those in the U.S., continues to draw eager purchasers from the eastern seaboard of the United States."
Meanwhile, cheap properties in the southern United States are "still having an impact on Canadian recreational property markets, drawing some purchasers south of the border to areas such as California, Arizona, Nevada and Florida."
The most expensive recreational property markets included, by average starting price: Sylvan Lake, Alta. ($1.2-million); Vernon, B.C. in the North Okanagan ($1.15-million); Tofino, B.C. ($875,000); Cultus Lake/Harrison Lake, B.C. in the Fraser Valley ($800,000); Whistler, B.C. ($799,000) and Salt Spring Island, B.C. ($750,000).
The cheapest properties were found in Newfoundland Coast, NL ($105,000), Shediac Bay ($230,000), and South Shore/North Shore, N.S. ($230,000 to $240,000) in Atlantic Canada;
The Laurentians ($175,000) in Quebec; Prince Edward County ($200,000 - $250,000), Elliot Lake ($215,000), Parry Sound ($219,900), East Kawarthas ($225,000), and Bancroft ($235,000) in Ontario; and South Central Cariboo ($180,000), Lake Winnipeg ($250,000), Canmore ($270,000) and Ucluelet ($499,000 for oceanfront) in Western Canada.
"Entry-level product is experiencing the greatest demand this year, as value-driven purchasers look to stretch their dollar as far as it will go," said Elton Ash, regional executive vice-president for Western Canada.
"This is especially true in Western Canada, where values have softened considerably year over year, but are now starting to firm up."