Canadian Winter Homes Experience Market Chill
Canada's renowned winter recreational regions, known for their world-class ski resorts, are facing a challenging real estate landscape, as indicated by a recent report from Royal LePage. The findings reveal a notable dip in home sales across the majority of these snow-covered havens during the first 10 months of 2023, accompanied by declining demand, increased inventory, and extended days on the market.
Market Trends and Factors:
The report highlights that 59% of surveyed winter recreational regions witnessed double-digit declines in home sales, with 47% of local experts reporting reduced demand in their respective areas. Contributing factors include the impact of high-interest rates, the rising cost of living, and economic uncertainties prevalent across the country. Additionally, climate factors and environmental disasters, exacerbated by an unprecedented wildfire season, played a significant role, with nearly a quarter of the markets experiencing a decline in buyer demand.
Regional Insights:
Whistler, Canada's renowned ski destination, saw prices remain relatively flat, down 0.4% in the first 10 months of 2023, while sales decreased by 12.3%. Affluent homebuyers in Whistler, accustomed to sales prices starting at $3 million for single-family homes, may yet feel the true effects of higher interest rates between 2024 and 2026 when many five-year mortgages come up for renewal.
In British Columbia, Sun Peaks and Big White experienced notable declines in sales—47.7% and 30.5%, respectively. Despite fewer properties coming to market, prices for single-family homes in both regions saw declines of 21.3% and 6.3%.
Alberta's Canmore region observed a 17.2% decline in sales, but prices increased by 9.6% year over year in the first 10 months of 2023. Sales conditions remain favorable for sellers, with the market reverting to pre-COVID norms.
Quebec's Mont-Tremblant faced a 33.5% decline in sales volume, yet single-family home prices increased by 7.8%. Luxury real estate in the region tends to be less affected during rising interest rate periods, contributing to the price growth.
Outlook for 2024:
Looking ahead, Royal LePage maintains optimism for the winter recreational market, forecasting a 2.9% growth in the price of single-family homes over the next 12 months. This outlook is contingent on stabilized interest rates throughout 2024. Despite weakened demand and increased supply compared to the pandemic-fueled boom, the market is anticipated to trend back to normal historical levels, supporting modest upward price trajectories as Canadians continue to seek homes in these desirable winter wonderlands.
