Recreational property sales seem to have been unaffected by the Canada Mortgage and Housing Corporation's (CMHC) recent decision not to insure second mortgages, with prices for vacation homes enjoying solid increases over the past year, according to RE/MAX's annual recreational property report released June 25.
The report said, "While some potential recreational buyers may have been discouraged by the CMHC's recent decision, little to no material impact has been witnessed from this change. There are many options available for financing and insuring mortgages on a second property."
One reason cited for the strength in the market is the weakened Canadian dollar, which is prompting Canadian buyers to purchase within their own country rather than in increasingly expensive US markets.
The report said that Canada's hot residential real estate market in urban centres has had a spillover effect on recreational property sales, particularly in markets within a two-hour drive of the country's large urban centres, where price rises have allowed homeowners to use equity gains to purchase a vacation home.
According to the report, Western Canada and BC are experiencing particularly strong markets that are on track to recovery since the 2008 recession and a post-2010 Olympics price dip, although sales have not yet returned to pre-recession levels.
"Consumer confidence [in Western Canada] is high and motivated buyers are seeking out their dream vacation homes, with some markets reporting the most activity seen since the recession," the report stated.
Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada, said, "We see momentum in recreational property sales, especially near urban centres where local residents have experienced several years of economic growth.
"This year we are seeing the effects of buyer confidence in some regions thanks to built-up equity gains and strong job markets across the West."
The report observed that buyers are particularly attracted to areas such as Salt Spring Island and Shuswap, which are known as rich cultural hubs with vibrant artistic communities and music festivals. The Okanagan Valley, with its internationally renowned wineries, is also seeing an increase of buyers from Alberta with new direct flights from Fort McMurray.
To read the full RE/MAX report, which includes recreational property prices broken down by individual areas across BC and Canada, click here.
To read REW.ca's story on Royal LePage's annual recreational property report, which includes price details for vacation homes in areas across BC, click here.
