Anyone hoping to purchase in cottage country this year can expect to face growing prices as buyer demand continues to outstrip available home supply.
New market projections released by Royal LePage forecast that the aggregate price of a single-family home in Canada’s recreational regions will rise 13 per cent in 2022 to $640,710 as demand outperforms supply.
However, prices aren’t expected to rise as much as they did last year. In 2021, the aggregate price of a recreational single-family home in Canada grew 26.6 per cent annually to $567,000. During the same time period, the aggregate price of a single-family waterfront property jumped 21.5 per cent from 2020 to $976,000, while prices for recreational condos were up 15.4 per cent yearly to $374,000.
According to a survey conducted with 151 Royal LePage recreational real estate professionals across Canada, 84 per cent stated that their market has less inventory in 2022 than last year for their respective regions. Fifty per cent of respondents reported significantly less available inventory.
“The factors challenging Canada’s residential real estate market — chronic low supply and growing demand — are amplified in the recreational property segment,” said Royal LePage’s president and CEO, Phil Soper, in the report. “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.
Soper explained that although the harshest of the COVID-19 pandemic restrictions are likely in the past and Canadians are getting back to normal activities, the way we view our homes has shifted. The desire for more indoor and outdoor space is expected to long outlive the pandemic, especially as buyers prioritize their desired lifestyle.
“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,” said Soper.
Recreational home prices to rise the most in Atlantic Canada, Quebec
When it comes to pricing, single-family recreational homes in Atlantic Canada and Quebec are anticipated to increase 15 per cent this year, the highest level of price appreciation nationwide.
Recreational properties in Atlantic Canada could average $272,550 in 2022. This is a slight drop in the rate of appreciation from 2021, when prices rose 24.1 per cent from 2020 to $237,000. In Quebec, the aggregate price of a single-family home in the province’s recreational regions is forecasted to hit $356,500 this year. Prices rose at a similar rate to Atlantic Canada in 2021, climbing 24.5 per cent year-over-year to $310,000 compared to 2020.
By comparison, single-family recreational properties in Ontario and British Columbia are expected to jump up in price between 13 per cent and 12 per cent in 2022, respectively. This would bring aggregate prices to approximately $737,890 and $1,029,280 this year.
Supply shortages will likely be a factor in pushing prices higher this year.
In Ontario, 91 per cent of respondents in Royal LePage’s survey said that more than half of the properties listed are selling above their asking price, a trend that has also been detected in Atlantic Canada (69 per cent), Quebec (68 per cent) and British Columbia (56 per cent).
For those located in Quebec, Ontario and British Columbia, 86 per cent, 84 per cent and 63 per cent of respondents say that there is significantly less inventory this year compared to last year.
“Demand from remote workers has dipped compared to peak demand last year as workers are increasingly heading into the office. However, many buyer hopefuls are still being priced out of the recreational property market in Rideau Lakes,” said Pauline Aunger, broker of record at Royal LePage Advantage Real Estate in Smith Falls.
“Inventory is extremely thin, and I expect that will continue to be the case through the spring, resulting in further price increases this year. With tight competition and multiple offers on just about every listing, the successful buyers are the ones who are coming prepared,” she added.
