Recreational property sales and prices in BC are climbing as consumer confidence has picked up in Metro Vancouver’s residential housing market.
Following a short-lived cooling off period following a foreign-buyer tax introduced by the province for Greater Vancouver in August 2016, buyers are entering the market in search of affordable recreational housing.
Both sales and prices are up for secondary homes in BC with an aggregate price of $595,077 in May, according to Royal LePage’s Canadian Recreational Housing report published today.
“Low inventory levels and the return of consumer confidence are driving prices up in many recreational markets across the province,” says Jim Morris, Royal LePage Western Canada manager, in a statement.
The annual report by the Canadian real estate brokerage gathers information from a cross-Canada survey of real estate advisors who specialize in recreational activity.
Nearly two-thirds of advisors surveyed said recreational property prices climbed in the majority of regions last month compared to the same period last year.
Additionally, 58 per cent reported seeing a year-over-year increase in sales volumes in their area.
In BC, Royal LePage predicts recreational sales activity will continue its upward trend this year with buyers searching for affordable cottages or lake houses.
Traditionally, buyers have moved east of Metro Vancouver to the Fraser Valley for affordable recreational homes. But, with prices rising steadily in the Valley, homeowners are now looking elsewhere.
“At the top of our list in terms of most sought after recreational areas is naturally the islands and the Okanagan,” Royal LePage realtor Adil Dinani tells BuzzBuzzNews.
According to Dinani, recreational sales activity in the province is up for a variety of reasons. For one, prospective buyers in Metro Vancouver are choosing to capitalize on their home’s equity to finance a leisurely lifestyle. Dinani also says retirees are investing in recreational properties and homebuyers are taking advantage of low interest rates.
Homebuyers are turning their attention to areas such as Nanaimo, Victoria and Kelowna, which Dinani says are home to strong economic centres along with affordable recreational housing options.
“A lot of local people who are feeling the pinch and are getting priced out of the Metro Vancouver market are looking at these other alternative markets as great places to establish roots and grow a family,” says Dinani.
According to the report, the amount of foreign buyers purchasing recreational homes in the province has remained unchanged compared to levels recorded last year.
Despite the foreign-buyer tax targeting transactions in Metro Vancouver, foreign purchases of recreational properties in BC accounted for less than 10 per cent of all secondary home sales, says the report.
However, 60 per cent of Royal LePage advisors surveyed said the amount of American buyers purchasing recreational homes in BC has increased this year compared to 2016.
Dinani says US buyers have always been prevalent in the market, but are currently taking advantage of the low Canadian dollar.
Most BC regions have seen a rise in recreational home prices with heightened demand and a shortage of supply.
For example, the Okanagan Valley region is seeing escalating prices as supply significantly decreased this year.
Interestingly, Dinani adds that historically an uptick in transactions and prices in the Okanagan usually correlates with a high price in oil. However, this year that does not seem to be the case and buyers are choosing the Okanagan because it can be a viable and affordable housing option.
“Oil is at $45 a barrel, so it’s not commodity driven rush. It’s not a market largely driven by Albertans. It’s a market that’s largely driven by local folks who are benefitted from the market, who are also looking at options,” says Dinani.