Royal LePage: Canadian recreational house prices forecast to increase 15% in 2021
- A house in Ontario’s and Atlantic Canada’s recreational property markets expected to see the highest price gains in 2021, rising 17%; Quebec and British Columbia recreational markets forecast to increase 15% and 13%, respectively
- 91% of recreational experts in Canada reporting lower inventory than typical for respective regions as demand continues to outpace supply
- 46% of recreational experts reporting an increase in inter-provincial migration, as many Canadians choose cottage country over cityscapes as the backdrop to their home offices
According to Royal LePage, the aggregate price of a house in Canada’s recreational regions is forecast to increase 15 percent in 2021 to $502,730, as demand continues to rapidly outpace inventory. The company revised its 2021 recreational property forecast, released in November 2020, upward to reflect the increasing unmet demand from potential buyers who are actively looking for properties.
“From coast to coast, the line between a primary residence and recreational property is blurring,” said Phil Soper, president, and CEO, Royal LePage. “The trend began last summer when the option of traveling abroad was taken away and continued to gain popularity as it became clear that with access to high-speed internet, many people can do their jobs from just about anywhere.”
The aggregate price of a house in Canada’s recreational property regions increased 16.0 percent year-over-year to $437,156 in 2020 compared to 2019. During the same period, the aggregate price of a waterfront property increased 9.8 percent to $813,385 and the aggregate price of a condominium rose 10.5 percent to $310,257.
Houses in the recreational regions of Ontario and Atlantic Canada are forecast to see the highest price appreciation in the country this year, set to increase 17 percent, while prices in Quebec and British Columbia are forecast to increase 15 percent and 13 percent, respectively. According to a survey of 190 Royal LePage recreational real estate professionals across the country, 91 percent said that their market has less inventory than typical for their respective regions, including 72 percent that reported significantly less inventory available.
In many areas, supply shortages are forcing buyers into multiple-offer situations, which often result in properties selling above the asking price. In Ontario, 87 percent of recreational real estate professionals said that more than half of properties available on the market are selling above the asking price. In Quebec and British Columbia, 65 and 52 percent respectively reported the same.
“The low inventory, high demand scenario that is defining Canada’s current real estate landscape can be frustrating for buyers and their agents,” continued Soper. “Without enough supply to meet demand, prices continue to increase at above normal rates. And with so few listings to choose from, owners are concerned they will have nowhere to go if they sell before buying, so they hesitate to list. This cycle makes it difficult for anyone to move ahead.
“Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada. The flexibility provided by working remotely, excess savings from months sitting at home, and low-interest rates have left Canadians young and old alike to seek properties with more space, easy access to nature, and the ability to achieve that ever-elusive work-life balance. And, an increasing number of new owners intend to use these escapes for both weekend play and Monday to Friday work.”
Royal LePage real estate professionals in Western and Atlantic Canada have reported an increase in out-of-province buyers over the past year. All experts in the recreational regions of the Maritimes and more than two-thirds (68%) of those in British Columbia reported seeing a boost in inter-provincial migration this year.
The younger generation is a very active segment of buyers. A recent Royal LePage survey released last month on real estate trends among Canadians aged 25 to 35 found that when given the choice, 47 percent said they would choose a small town or country living, while 45 percent said they’d prefer to live in a city. Nearly two-thirds of Canadians in this age group (63%), who are employed or seeking employment, say the ability to work for an employer that allows the option of remote work is important. Fifty-two percent said the availability of remote work has increased their likelihood to move further from their current or future place of work. Overall, 39 percent of this cohort are considering a move from their current home to a less dense area as a result of the pandemic, while 46 percent said the pandemic had no impact on their desire to move to a less dense area.
“According to our research, access to high-speed internet and the ability to work remotely is among the top criteria for those seeking properties in Canada’s recreational regions, followed closely by four-season usability,” said Soper. “There is no doubt the pandemic has had an impact on our lifestyle, but also our mindset. The more time Canadians spend in their homes, the more apparent their needs and priorities become.”
Royal LePage 2021 Spring Recreational Property Price Forecast and 2020 Price Data Chart (national and regional): rlp.ca/table_2021springrecreationalpropertyreport
Read the FULL ARTICLE