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Canmore strong as recreational property inventories remain tight

A series of record-setting sales underscore Canmore's strength in the West
The record-setting price of 147 Cairns Landing in Canmore underscores the strength of recreational property as listings remain low and demand steady this year.

Canmore is set to be one of the best markets in Western Canada for price appreciation this year when it comes to recreational properties, thanks in part to steady demand that’s outstripping supply.

Re/Max Canada’s annual cottage report, released April 30, forecasts a 10 per cent increase in the average price of recreational properties in Canmore to an average of $1,144,464, placing it firmly ahead of all other recreational markets surveyed except for Whistler.

“Buyer demand has dropped from the pandemic,” said Richard Greaves, owner and managing broker at Re/Max Alpine Realty in Canmore, but the town remains just an hour’s drive from Calgary and its international airport, and minutes from ski hills and trails within provincial and national parks.

This has supported buyer demand, which hasn’t diminished even as listings have dwindled and high construction costs have limited new supply.

“We have a lot of demand and it just doesn’t seem to be waning at all,” Greaves said. “We don’t have a lot of buildings to increase that supply any time soon. … The lack of supply is what’s keeping prices high.”

Buyers have shown a willingness to pay higher prices.

Canmore saw its most expensive residential transaction ever in mid-April with the $7.5 million sale of 147 Cairns Landing, a six-bedroom home on a half-acre lot in the Three Sisters Mountain Village area.

“We’ve never seen prices like that,” Greaves said.

It easily trumped the previous record, set in December, when one of the agents in Greaves’ office sold a four-bedroom home at 113 Spring Creek Lane for $6.2 million. The previous record of $5.5 million was also set last year, underscoring the importance of top-end buyers in keeping Canmore’s recreational market moving.

Canmore’s strength stands in contrast to other Alberta markets, which generally outpaced it last year.

Re/Max reported that Canmore prices gained just 8 per cent last year, well below destinations such as Edmonton Lakes (up 22.7 per cent to $477,104) and Sylvan Lake (up 14.9 per cent to $666,949). Both markets will see increases of just 5 per cent this year, and at much more affordable price levels.

Canmore’s lead in pricing is cemented by a drop in the second priciest market outside Whistler, Tofino, where waterfront properties are set to decline 10 per cent to $901,004 thanks to limits on short-term rentals.

Ucluelet will see prices appreciate by 10 per cent on par with Canmore but off a lower base that will see prices end the year in the range of $744,373.

Re/Max doesn’t provide a forecast for Whistler, noting that “market conditions evolve throughout the year based on a variety of factors.” However, similar to Canmore, top-end buyers remain active there, with the resort municipality reporting its most expensive condo sale ever March 20 with the $9.3 million sale of a 3.5-bedroom corner unit at the Four Seasons Private Residences.

Despite concerns about the impact of federal policies, including the ongoing moratorium on foreign purchases as well as changes to the capital gains threshold, Greaves doesn’t see things changing much this year.

Buyers are primarily from Alberta, with an uptick in interest from Ontario buyers.

Vendors are primarily those who haven’t been using their properties as much as in the past, especially older owners who are now thinking about downsizing.

Canmore has a large short-term rental market, but the post-pandemic revival in international tourism has meant that those units are once again generating healthy cash flows that offset concerns about changes to capital gains exemptions announced in last month’s federal budget and expected to take effect in June.

“We’ve had a few calls,” Greaves said of the changes to capital gains exemptions. “Some people have probably brought their timeline up to sell who were already thinking about selling this year, but we haven’t seen an influx of inventory.”

That lack of additional inventory means that capital gains are likely to continue on second homes in the Canmore market for the foreseeable future.