Over the last two years, there has been a remarkable shift in consumer demand for living space. Many homebuyers left their smaller spaces in the big cities, in favour of larger spaces in smaller towns – or even cottage country and rural communities. But what about ski towns and mountain locations?
Demand for homes near the mountains of Alberta and British Columbia has been accelerating since the beginning of the COVID-19 public health crisis. But are these types of recreational properties surpassing the more traditional cabins in the heart of “cottage country?”
Surprisingly, yes, and this could continue as long as people have the option of working remotely.
In recent years, homes in mountain towns and ski regions have experienced exceptional sales activity and price growth. While these types of properties and jurisdictions had typically been reserved for vacation and recreational pursuits, they have quickly turned into permanent all-year-round residences for retirees selling their homes in the big city and young professionals mulling over other housing alternatives, especially in the provinces of Alberta, Ontario and British Columbia.
But some recreational property markets are performing better than others. One of them is Canmore, Alberta, situated west of Calgary in the Bighorn Region.
Canmore recreational properties have seen sales volumes accelerating since the start of the coronavirus pandemic. As CBC News noted in May 2021, the growth has been “unprecedented.”
Like other Canadian housing markets that have been sizzling, Canmore faces a significant supply problem that could further add to soaring valuations and curtail sales growth.
In March, the median sales price for a single-family home in Canmore surged at an annualized rate of 33.5 per cent to $1,399,200, data from the Calgary Real Estate Board (CREB) highlighted. Condominium prices are inching toward $600,000. Here are some other CREB numbers from the Bighorn Region in March:
- Residential Sales: 62
- New Listings: 80
- Active Listings: 81
- Months of Supply: 1.31
- Sales to New Listings Ratio (SNLR): 78 per cent
“We’ve had exceptional sales throughout the Canmore area, but the listings and the supply haven’t kept pace,” said Ann-Marie Lurie, the chief economist with the Alberta Real Estate Association, told CBC last summer. “And that’s what’s causing some of the price gains that we’re seeing in that market.”
Based on the latest housing construction activity data and developments over the last year, some housing experts are forecasting additional growth. Still, it might not be as meteoric as the first two years of the pandemic housing market.
According to Canada Mortgage and Housing Corporation (CMHC), housing starts increased 57 per cent to 22 units in the first quarter of 2022, up from 14 in the same January-to-March period in the previous year.
In addition, the town is in the beginning stage of allowing secondary suites to be constructed in existing neighbourhoods. Officials are also extending $20,000 worth of financial incentives for homeowners to build accessory dwelling units. Moreover, builders are looking to develop scores of residential lots closer to the downtown core, converting them into more than a dozen townhouses.
As the Calgary Herald noted, Canmore is attracting both out-of-town and out-of-province buyers. But are newcomers already being priced out of the Canmore real estate market? This has become a growing concern for those wishing to enjoy the mountain life, particularly for companies assessing the concept of employee housing.
And this could be a hurdle to overcome for small businesses attempting to appeal to younger workers.
“It’s harder for young people to find affordable accommodation,” said Michel Dufresne, the director of the Job Resource Centre for Banff and Canmore, last year. “It also makes it harder for small businesses to provide that housing for their employees. It’s become a bigger play when you have to buy a house for a million dollars to house five people. It’s very costly.”
For now, the conversation is all about new supply coming to the housing market, say CREB officials.
“Supply levels are expected to improve relative to demand,” the Board noted in its 2022 housing forecast. “However, renewed confidence in the energy sector, plus new industry growth, could result in stronger-than-expected housing demand. If housing demand remains persistently strong and building delays and costs continue to increase, the housing market could take longer to return to balanced conditions, causing stronger-than-expected price growth in the resale market.”