Planning To Spend Your Summer in Cottage Country?
You’re not alone… Royal LePage is forecasting aggregate house prices in recreational regions to increase 13% in 2022, following a sizzling 26.6% jump in year-over-year prices in 2021.
According to Royal LePage, the aggregate price of a single-family home in Canada’s recreational regions is forecast to increase 13.0 per cent in 2022 to $640,710, as demand continues to outpace supply.
“The factors challenging Canada’s residential real estate market – chronic low supply and growing demand – are amplified in the recreational property segment,” said Phil Soper, president and CEO, Royal LePage. “Demand for recreational properties continues to vastly outstrip inventory in many cottage regions across the country. Waterfront and mountain-top locations near cities are limited by nature, even in a vast land like Canada, forcing buyers into multiple-offer scenarios. Even more than in urban regions, it is vital that buyers and sellers employ the services of a local agent who has recreational market expertise.”
Single-family recreational homes in Atlantic Canada and the province of Quebec are forecast to see the highest price appreciation in the country this year, set to increase 15.0 per cent, while prices in Ontario and British Columbia are forecast to increase 13.0 per cent and 12.0 per cent, respectively. According to a survey of 151 Royal LePage recreational real estate professionals across the country, 84 per cent said that their market has less inventory this year than last year for their respective regions, including 50 per cent that reported significantly less available inventory.
“While the harshest of the pandemic-related restrictions may be behind us, and Canadians are starting to resume normal activities once again, some things will remain forever changed. The way we view our homes, and our connection to community and nature have shifted,” said Soper. “The desire for homes with more space, both indoors and out, is a trend that I believe will long outlive the pandemic. Many Canadians, especially those with the option to continue working remotely, are prioritizing their desired lifestyle when considering where they want to live. Recreational regions offer greater access to nature and, as a secondary property, can be a good investment if used as a rental home, even in part.”
The aggregate price of a single-family home in Canada’s recreational property regions increased 26.6 per cent year-over-year to $567,000 in 2021, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 21.5 per cent to $976,000, and the aggregate price of a condominium rose 15.4 per cent to $374,000.
Across the country, a chronic shortage of supply of recreational properties continues to pose a challenge for buyers, often forcing them into multiple-offer situations. In Ontario, 91 per cent of Royal LePage recreational real estate professionals surveyed said that more than half of properties listed are selling above the asking price. In Atlantic Canada, 69 per cent of recreational property experts reported the same, followed by 68 and 56 per cent in Quebec and British Columbia, respectively.
“In addition to increased interest from young families, there remains a strong demand for recreational properties from buyers nearing retirement,” said Soper. “With remote work options, Canadians are transitioning into their final working years while getting to know their new community.”
The 2021 Royal LePage Boomer Survey found that 35 per cent of boomers in Canada said they were considering purchasing a primary residence within the next five years. Of them, more than half (56%) said they were considering buying in a rural or recreational region, which could result in up to approximately 1.8 million Canadians having entered the recreational real estate market within the five year period.
Royal LePage 2022 Spring Recreational Property Price Forecast and 2021 Price Data Chart (national and regional):rlp.ca/table_2022springrecreationalpropertyreport