While few western Canadians believe they can afford a resort property, those in the market for them realize year-round resort properties brim with cash flow potential.
According to a report from REMAX, ski resorts—which have become destinations 12 months of the year—are replete with relatively affordable ownership opportunities, however, 67% of respondents in a survey conducted by Leger Marketing aren’t confident they can afford them.
“We know a large proportion of Canadians want to buy properties,” said Elton Ash, REMAX’s regional executive vice president. “The number drops down to 23% who believe they could afford it. It’s really about what they can justify in personal lifestyle and what they’re able to afford.”
One reason the appetite might not be especially voracious for resort properties is that, while Canadians are indeed interested in owning them, they are dissuaded by the financing nightmare.
“They’re not super coveted,” said mortgage broker Iain Macfadyen of Vanderkamp Vancouver. “People realize that they take on a lot of the property risk with these, and if it’s part of a hotel the running costs are high enough that they won’t see much money on renting it out. The financing on these things is also more expensive. When they see the extra interest that they will have to pay, it no longer seems like a good option.”
However, Macfadyen believes purchasing a resort property could still be a worthwhile investment.
“Short-term rentals are more popular, even out in Whistler,” he said. “They’re restricted but people find ways around it. There are more people buying rental property as a hedge against further housing inflation because it’s been a down market.”
Ash echoed those sentiments, and added that it could explain why four-season amenities factor so prominently into Canadians’ interest buying resort properties.
“The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when they’re not using the property themselves, and that’s where four-season amenities become important,” said Ash. “The properties cash flow through winter and summer months.”
In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses.
“What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed to just lakeside properties like you find in the Muskokas, Northern Ontario or the Okanagan.”