B.C.’s weekend cabins are sitting tight as buyers in the province’s recreational real estate market wait on the sidelines.
While demand remains muted across the province, 54 per cent of B.C. recreational property experts expect demand to increase slightly once interest rates start to come down, according to a March 20 survey from Royal LePage.
“It's pretty slow,” Frank Ingham, associate broker with Royal LePage Sussex, said in an interview.
“People are hanging in there, they’re waiting to see. … No question that there's money out there, but prudent people that have lots of it are still waiting to see if the sky's going to fall. Will interest rates go up? Are they going to stay the same or will they go down? And that might be the final signal to get folks to move ahead.”
The weighted median price of a single-family home in the province’s recreational property market increased by 0.3 per cent in 2023 to $1,086,500 when compared to 2022, according to the report.
Prices for single-family waterfront properties decreased by 8.5 per cent to $2,295,400 in 2023, while condominium prices decreased 6.3 per cent to $415,000.
However, the Royal LePage report is predicting a price increase of five per cent for single-family homes to $1,140,825 in 2024.
Canada’s inflation rate hit 2.8 per cent in February, according to Statistics Canada data released this week. In a client note referring to the latest inflation figures, BMO chief economist Douglas Porter predicted rate cuts would commence in June.
“The biggest question we've yet to answer in this market is what will happen with interest rates. We see pent-up demand lingering on the sidelines as buyers wait for the first highly anticipated rate cut by the Bank of Canada. We expect the pace of the spring market to be stable, returning to seasonal norms. That could quickly change as an interest rate cut will spark higher levels of activity,” Francis Braam, broker and owner of Royal LePage Kelowna, said in the report.
Of those surveyed in B.C., 50 per cent reported less inventory this year compared to 2023, and 46 per cent reported similar demand. In addition, 42 per cent said that the average days on market has increased slightly since this time last year.
“As we get closer to spring there will be more inventory coming on and there'll be more buyers. If the bank at least stays where it is, that will be a good indicator, but if they drop, that'll open up the doors quite a bit more than what we're seeing as of late,” said Ingham.
