If you’re looking to buy a winter home, it might be a good time to enter the cooling market with prices dipping and inventory rising in some of Canada’s popular ski regions.
Nationally, the median price of a single-family detached home in the winter recreational market went down 0.7 per cent in the first 10 months of 2023 compared with last year, according to a Royal LePage report published Wednesday.
In 2023, the median price of a single-family detached home in that market was an estimated $1,068,200.
Demand for winter recreational properties has cooled down this year, largely due to high interest rates, the rising cost of living and uncertainty about the economy, Royal LePage said in its Winter Recreational Property Report.
Since March 2022, the Bank of Canada has hiked its interest rate 10 times but has held it steady the last two decisions. The central bank’s final rate decision of the year is slated to come on Dec. 6.
Pauline Aunger, broker of record at Royal LePage Advantage Real Estate, said there has been a “softening” of the winter recreational market and the interest rates have had a “big effect” on buyer decisions, with Canadians playing a “wait-and-see game” across the country.
However, she said it’s a “great time to jump into the market” amid an increase in inventory.
“This is a great time to go out looking for the perfect winter recreational property and having the luxury of seeing a few more listings than you would have even two years ago,” Aunger told Global News in an interview.
Four in 10 (41 per cent) of Royal LePage’s recreational property market experts reported an increase in inventory as a direct result of rising interest rates.
Non-economic factors have also had an impact on demand.
Nearly a quarter (24 per cent) of Royal LePage’s recreational property market experts reported a decline in buyer demand this year due to climate factors or environmental disasters, after a record-setting wildfire season in Canada.
“We had unprecedented wildfires this year and that has really changed (demand) in some markets because we’ve lost housing,” Aunger said.
The Royal LePage report looked at prices for 18 popular ski regions across Canada between Jan. 1 and Oct. 31 and compared them with the same time period last year.
In Ontario’s Southern Georgian Bay region, including Collingwood, Meaford and Thornbury, the median price of a single-family detached home decreased by 10.1 per cent to $800,000 this year.
In British Columbia’s ski regions, the overall median price dropped by 1.6 per cent to $2,026,400.
Meanwhile, Alberta’s Canmore, a tourist hub in the Rocky Mountains, saw prices rise 9.6 per cent – with the median price of a single-family detached property sitting at $1,707,300.
Quebec’s ski regions also saw an increase in recreational home prices, going up 7.8 per cent to $501,600 for a single-family detached house.
Zoning laws, wide range in property styles and a strong real estate demand near the slopes — despite rising property taxes and high interest rates — have led to price appreciation in these places, Royal LePage brokers say.
Over the coming 12 months, Royal LePage is forecasting an increase of 2.9 per cent in the median price of a single-family detached home to $1,099,661 in the winter recreational market.
Many economists are not expecting any further interest rate hikes from the Bank of Canada in the current cycle, with market watchers surveyed at the end of September forecasting a rate cut coming in the spring of 2024.
Aunger said that could “open up” the winter recreational market to interested buyers.
“I think we’ll continue to see prices slightly rise over the next year, but I think we’re also going to see a little more inventory come out, which is really going to give buyers some choices,” she said.
“Overall, recreational properties are very different than a residential market, so as more people retire, we also see them perhaps choosing full-time to live in a winter recreational property.”
How much money recreational homeowners can earn from renting out their place for short stays is also likely going to change in parts of the country.
While some provinces and cities are cracking down on short-term rentals, the federal government also unveiled a new proposed tax measure in the 2023 fall economic statement that would deny income tax deductions for people leasing short-term properties, making it less lucrative to list homes or apartments on platforms like Airbnb and VRBO.
— with files from Global News’ Craig Lord.
© 2023 Global News, a division of Corus Entertainment Inc.