Sylvan Lake is a balanced market, with a 38% sales to listing ratio in April 2021. The region is active in residential, cottage and lakefront properties, but supply is slow to come on the market. Families, millennials, couples, retirees, and out-of-province buyers are all driving demand for the Sylvan Lake region. Most recreational property buyers are in Central Alberta, or in Edmonton or Calgary. Many of these buyers sold properties in the U.S. and are looking for something closer to home.
When it comes to the COVID-19 pandemic’s impact on Sylvan Lake’s recreational property market, strong demand is anticipated to continue due to the influx of buyers the region has experienced, with none of them planning to step back due to the rising prices. COVID-19 negatively impacted the market in April and May of 2020, but since then has had a positive impact. Preferred features for recreational homes include space in order to work from home and proximity to water.
The anticipated price growth for recreational properties in Sylvan Lake over the remainder of 2021 is an increase of +5% for waterfront and +5% for non-waterfront homes.
Canadian Cabin & Cottage Trends
The red-hot demand seen across the Sylvan Lake real estate market is a common thread across Canada, as interest and activity in suburban and rural property markets continues to grow. Despite rising demand, 57 per cent of Canadian recreational markets still have at least one property type with average prices below $500,000, according to the 2021 RE/MAX Recreational Property Report.
This bodes well for the 78 per cent of Canadians who plan to purchase a property in the next year and consider themselves to be “recreational buyers,” according to a Leger survey that was conducted on behalf of RE/MAX. More than half of those who plan to purchase a property in the next year (54 per cent) are first-time recreational property buyers. Of those planning to purchase a recreational property, 21 per cent are looking to recreational markets after being priced out of an urban centre. However, low borrowing rates are working in their favour, with 22 per cent saying the lower rates have increased their ability to buy.
The survey also found that 11 per cent of Canadians were searching for a recreational property prior to the start of the pandemic and are still searching, and 15 per cent of Canadians who were not searching for a recreational property prior to the pandemic are now looking.
Shifting home-buying trends, as prompted by the pandemic, are exacerbating inventory challenges in a majority of recreational markets across Canada. The growing demand in these regions is also putting upward pressure on prices which is impacting affordability in many recreational markets, which RE/MAX brokers anticipate will be a long-term trend.
“There’s intense competition among buyers in Canada’s recreational property markets and inventory is stretched thin,” says Christopher Alexander, Chief Strategy Officer and Executive Vice President, RE/MAX of Ontario-Atlantic Canada. “But Canadians recognize that recreational properties remain an affordable option in such a turbulent market. There are still many recreational markets across Canada that are deemed affordable, despite the growing demand and rising prices.”
According to RE/MAX brokers and agents, sellers’ market-like conditions are anticipated to persist for the remainder of the year in 97 per cent of regions examined in the report. These conditions are typically accompanied by rising prices, which has been a trend in 2020 that is expected to continue through 2021. RE/MAX brokers report that 57 per cent of Canada’s recreational markets include at least one property type priced in the $200,000 – <$500,000 range. This is down from 87 per cent in 2019.
The most affordable recreational regions for waterfront properties across Canada include Thunder Bay ($425,805), Charlottetown ($334,447) and Interlake Region of Manitoba ($363,833), while Okanagan ($2,430,434), Barrie-Innisfil ($1,841,217) and Niagara region ($1,546,561) are the most expensive recreational property markets for waterfront properties.
“In today’s real estate landscape, with increased demand and ongoing supply issues putting pressure on prices and sparking bidding wars, industry professionalism is of utmost importance,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Recreational markets across Canada are feeling the pressure, and without a solution to address supply issues, we are running out of affordable options for Canadians.”
Unsurprisingly, affordability remains the top buying criteria for 41 per cent of Canadians who are in the market for a recreational property, followed by proximity to water or waterfront, amenities and good Wi-Fi. With demand for recreational properties anticipated to remain strong for the remainder of the year, lifestyle factors typically found in city homes, such as restaurants, Internet connection and office space are expected to remain a priority among buyers.