Warm weather helping recreational property sales

Sales activity in Canada’s recreational property market is beginning to pick up after a slow start to the year due to a harsh winter and delayed spring, says a new report released Thursday by Royal LePage.

The 2014 Recreational Property Report said a long and severe winter delayed the traditional spring buying season, but the arrival of waterfront-friendly weather has increased interest, is generating higher inventory levels and is driving sales activity.

Phil Soper, president and chief executive of Royal LePage Real Estate Services, said the recreational property market in eastern British Columbia – areas to Invermere, Salmon Arm and Fernie – have all picked up this spring.

“What our realtors are telling us in those regions is that the majority of buyers are from Alberta,” said Soper. “So with the general lift in consumer confidence in the province and the positive attitude you see reflected in the regular urban residential real estate market it seems to be spilling over into recreational markets and of course that would apply to Alberta recreational markets as well.”

In the middle of the last decade, there were record levels of sales activity in the recreational property market, driven largely by the retirement dreams of the Boomer generation but the subsequent economic downturn dampened demand in the sector, said Soper.

“Post-recession, our research found that incremental sales were driven largely by low interest rates and investors. With the 2014 market, we are seeing a return to primarily lifestyle-driven demand for cottages, cabins and chalets. Canadians continue to seek the opportunity to escape to a weekend retreat,” he said.

“Economic factors such as a stable job market, inexpensive mortgage financing and steadily improving consumer confidence remain supportive for purchasers considering recreational properties. Many Canadians dream of owning a country retreat to get away from the pressures of life in the city and the daily grind. The pursuit of a place to gather with family and friends is a notion that seems to be more attractive now than ever.”

Soper said that sharp rises in the price of recreational properties in U.S. regions favoured by Canadians, such as Arizona, Florida and California, coupled with a lower Canadian dollar relative to the American currency, is beginning to impact the Canadian recreational market.

“People who were previously wooed by bargain shopping for real estate south of the border are finding the real deals are now at home,” he said.



Calgary building permit value soars in April 33.9% hike from previous month

 The total value of permits was up in 19 of the 34 Canadian census metropolitan areas in April, led by Calgary, London and Halifax, according to Statistics Canada. The federal agency reported Thursday that “Calgary posted the largest increase, as a result of higher construction intentions for institutional buildings, commercial structures and multi-family dwellings.” Permits in Calgary reached $597.6 million in April, up 33.9 per cent from March. However, on a year-over-year basis permits in the Calgary region were off by 23.2 per cent. In April, the residential component reached $318.9 million, up 19.57 per cent from March while the non-residential sector was $278.7 million, up 55.26 per cent from the previous month. “Residential building permits so far this year have moderated compared to the elevated level reached in 2013,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “As such, the heightened pace of new construction experienced in the last several months is not expected to be maintained. Total housing starts after four months were up 64 per cent from the previous year. While total housing starts in 2014 are forecast to rise, the gain will be less pronounced by the end of the year.” In Alberta, total permits of $1.3 billion were down 0.6 per cent on a monthly basis and off by 13.5 per cent year-over-year. The province saw its residential component rise however to $791.2 million, up 5.4 per cent from March and an increase of 6.0 per cent from last year. But the non-residential sector in the province dropped to $489.2 million, down 9.0 per cent month-over-month and a decrease of 33.3 per cent year-over-year. Nationally, total permits across the country reached $6.0 billion which represented a monthly jump of 1.1 per cent but a year-over-year decline of 13.4 per cent. In Canada, the residential sector saw permits valued at $3.7 billion. That was a two per cent increase from March but down 13.8 per cent from a year ago. The non-residential sector saw permit value drop by 0.4 per cent on a monthly basis and by 12.7 per cent on an annual basis to $2.3 billion. Nick Exarhos, of CIBC World Markets Economics, said Canadian building permits for April came in weaker than expected. He said the Canadian housing should still experience a bit of a pick up from the first quarter after the effects of the unseasonably cold weather roll off.