It's going to be a busy 2021: Cottage sales rep on hot recreational property market
Canadians continue to choose cottage country over cityscapes as the backdrop to their home offices, a trend that has drove the price of recreational properties higher in four key regions, according to a new report released by Royal LePage.
The report found that the aggregate price of a home in areas where Canadians often have a recreational home – Ontario, Atlantic Canada, Quebec, and B.C. – is forecast to increase 15 per cent this year to $503,730, extending a similar price increase witnessed in 2020.
The report found recreational homes in Ontario and Atlantic Canada are both forecast to see the highest price appreciation in the country in 2021 at 17 per cent, to $547,207 and $226,961, respectively.
Prices are also expected to climb in Quebec and B.C., according to the survey, which predicts an increase of 15 per cent to $291,993 and 13 per cent to $781,918, respectively.
“From coast-to-coast, the line between primary residence and recreational property is blurring,” Phil Soper, president and chief executive officer of Royal LePage, said in a news release.
According to Soper, prices for recreational homes began rising last summer when the pandemic halted international travel and many Canadians realized that they could do their jobs anywhere as long as they had access to high-speed internet.
“Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada,” Soper said.
“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.”
In 2020, the aggregate price of a house in these four regions increased 16 per cent year-over-year to $437,156, according to Royal LePage. During the same period, the aggregate price of a waterfront property increased 9.8 per cent to $813,385 and the aggregate price of a condo rose 10.5 per cent to $310,257.
Demand continues to outpace supply
In a separate survey where Royal LePage polled 190 of its sales representatives, 91 per cent of respondents warned of lower inventory in their respective region as demand continues to outpace supply.
Royal LePage said supply shortages are forcing buyers into multiple-offer situations, resulting in properties selling above the asking price.
The company said 87 per cent of recreational real estate professionals in Ontario said more than half of properties available are selling above their listed price. In Quebec and B.C., 65 per cent and 52 per cent, 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,” Soper said. "Without enough supply to meet demand, prices continue to increase at above normal rates.”
The survey also noted that 46 per cent of people polled in the four regions reported an increase in inter-provincial migration. All real estate professionals in the recreational regions of the Maritimes and 68 per cent of those in B.C. reported a boost this year.