Alberta's lakefront properties see prices soar amid bidding wars
Sparse inventory can't feed a growing demand for recreational homes in places such as Wabamun Lake
With demand outweighing supply, the cost to buy a lakefront recreational home in some parts of Alberta has risen more than 80 per cent in the past two years, according to Royal LePage's Canadian Recreational Property Report.
The 2017 report states that lakefront properties on Wabamun Lake, 65 kilometres west of Edmonton, averaged $516,900 over the year ended May, 2017, rising from $480,000 in the year ended May 2016 and from $280,000 over the year ended May, 2015.
At $816,700, Alberta has the highest provincial aggregate price for recreational properties in Canada "as a result of the province's limited availability of lakefront property near major metropolitan areas," the report says.
Wayne Heine has been selling lakefront real estate in northern Alberta for six years, since coming out of retirement as a Edmonton-based agent. His business operates from May to October, which is when 90 per cent of lakefront recreational home sales take place, allowing him to spend his winters in California.
He says his website averages 50,000 visitors each year, he has a database of 10,000 interested buyers and he recently expanded his sales team. During the summer of 2016 he claims he sold 43 lakeside properties with a total value of $18-million.
Mr. Heine's region includes Lac Ste. Anne, Lake Isle and Wabamun Lake. All three lakes have a year round population of 9,000 and a summer population of up to 40,000. Wabamun Lake, Mr. Heine says, has become a real estate hotbed in the last few years. It's where he has his own summer home, which he bought in 1989 for $65,000.
"In 2011, the year I started selling here, there were only two sales over $500,000 on Wabamun Lake. Even three or four years ago, you could buy a lakefront property for $350,000. This year's highest property sale so far has been $1.15-million and I sold a lakefront site a few weeks ago for $720,000," he says. "It's gotten a little crazy out here."
Mr. Heine claims Alberta's depressed economy hasn't dampened lake-lovers' enthusiasm for Wabamun.
"If we have a problem out here it's an inventory problem; we just don't have enough homes coming to the market," he says. "These are heirloom properties. This summer I sold a lakefront home that had been in the same family since the 1930's. I'd say 40 per cent of the market will only sell to a neighbour or the property gets transferred to a family member. That only leaves 60 per cent for real estate and a portion of those are sold before they're even listed. We have million-dollar buyers out here struggling to find property, that's our problem."
Mr. Heine says Wabamun's appeal lies in its clean water, absence of algae, an ideal size and depth for boating and its proximity to Edmonton. The lake is a 40-minute drive from the city and, according to the Recreational Property Report, buyers in Alberta are only willing to drive up to two hours from their primary residence to their getaway home.
The report also found that recreational home buyers are predominantly age 36 to 51 years old, with children, who cited "lifestyle and vacationing" as their main reason for purchasing a recreational property.
Mr. Heine concurs this is what he's witnessing on Wabamun Lake. "Ninety per cent of our buyers come from the greater Edmonton area; these are professionals, not retirees, and time is important to them. We have heart surgeons and doctors out here who can be on-call and still enjoy their lake home because they can get to Edmonton in under an hour."
"These are all cash buyers," he adds. "I don't see any financing out on Mabamun Lake. I see financing on Lac Ste. Anne and Lake Isle but not Wabamun."
Last summer, Gloria Deets and her husband Darren, both 50, decided to make the leap from regular lake-goers to lake house owners. Their lake of preference was Wabamun but, as the couple began to search for a home, they soon realized buying there might not be as easy as they first thought.
"The situation really caught us by surprise," Mrs. Deets says. "We thought with the Alberta economy the way it is right now prices might have dropped; we thought it would be an easy purchase. We were quite shocked to find that there's bidding wars for lakeside properties out here and prices have been escalating not falling."
The couple, who live in St Albert, an hour's drive from the lake, were outbid on their first property, which was on the market for $1.5 million, last fall. They were outbid for a second time on a site which sold for $720,000 early this summer. A chance wrong turn while viewing properties led them to the home they would eventually buy; a for-sale-by-owner property on a large lakefront lot.
"It's an older property, built in the 1950's, with three bedrooms in the main cabin and a two bedroom suite above a garage," says Mrs. Deets. "It has clear water and good depth for our boat and a little beach and a fire pit. We have two teenage sons so the separate suite will be great for them as they get older."
"It's old but it's been well maintained," she continues, "the plan is to get five to ten years out of it before we do anything to it and that way we can make sure we like the cabin lifestyle and we're getting use out of it."
The 1,000 square foot cabin and 400 square foot suite has had just two previous owners. It came complete with furnishings, a garage full of tools, a Sea-Doo and a Sea-Doo boat; items which were non-negotiable in the sale.
The Deets took possession of their lakefront property in July and recently returned from a two-week vacation in their new lake home where they got to know their new neighbours.
"Our neighbour's cabin has been in their family for generations; their great-grandfather bought it for $500 which is pretty incredible," says Mrs. Deets. "We hope ours will turn out to be a good investment but maybe not that good," she says with a laugh.