Low Loonie and Interest Rates Driving Recreational Real Estate Sales: Royal LePage
Cabin market “alive and well” in BC and across Canada, but some eastern BC areas affected by low energy prices, says annual recreational property report
Joannah Connolly
Other
The low loonie and historic low interest rates have contributed to a surge in recreational real estate activity this spring, after a slow start to the year, according to the 2015 Royal LePage Recreational Property Report released June 4.
Canadians who might have previously bought recreational property in the US are finding it too expensive with the low Canadian dollar, driving them to buy in within Canada instead, say the report.
On the flip side, the low loonie is attracting increased investment in recreational real estate from US and other overseas buyers.
Added to this are historic low mortgage interest rates that are driving buyers to act now if they want to get a vacation home.
These driving factors have largely offset the negative impact Canada’s depressed energy sector has had on the buying power of those in oil-dependent provinces – although there are notable effects of this in some border areas of eastern BC, where sales and prices are down, said the report.
However, Phil Soper, president and chief executive of Royal LePage, insisted that the market was not largely adversely affected by low oil prices.
“In a roundabout way, the fall in oil prices is supporting the recreational property market this year,” said Soper. “Cheaper gasoline makes the prospect of a weekend commute to the lake a more affordable proposition. And cheap oil means a lower Canadian dollar, which has more people looking at Muskoka, Tremblant and the BC interior and fewer casting covetous glances at Florida and Arizona. We are even seeing money making its way north, particularly in British Columbia, Alberta and Atlantic Canada, as the strong US currency has increased American buying power.”
Royal LePage also identified key areas and typical prices for recreational real estate in each province.
Of the six areas in BC that were identified (South Cariboo, Cranbrook/Sparwood, Gulf Islands, Kelowna, Rathtrevor Beach and Vernon) the least expensive properties by far were found on the Gulf Islands. A typical waterfront lot on a BC Ferries-served island costs $100,000, said the report – 10 times less than the $1 million price tag a similar lakefront lot in Kelowna or Vernon.
© 2015 Real Estate Weekly