Canadian Recreational Property Prices Forecast to Rise 4.7%
- Low inventory results in 7.2 per cent price gain in Ontario’s cottage country
- Despite spring flooding in Quebec, prices are projected to remain strong (5.6%)
- Prices in British Columbia’s soft recreational property market forecast to remain stable while sales continue to decline
TORONTO, June 6, 2019 –Recreational property in Canada saw healthy price gains leading up to the 2019 spring market, rising 5.0 per cent to $411,471 compared to the previous year. Royal LePage is forecasting another year of solid gains (4.7%) as high demand in Ontario and Quebec continue to put upward pressure on prices, offsetting softer market conditions in British Columbia. Low inventory in Ontario and weak demand in British Columbia were the primary drivers of a decline in Canadian recreational property sales (-8.3%).
In most of the country, young families are competing with baby boomers for homes in popular recreational property regions.
“With the youngest baby boomers a decade away from retirement, and their older peers well on their way, we are seeing robust demand for cottage, cabin and chalet-style retirement properties,” said Phil Soper, president and CEO, Royal LePage.
“Young families have traditionally made up a significant portion of the demand for recreational property, as they look to create a special place for children to grow up,” Soper continued. “Today they find themselves having to compete with their parents for that spot on the water, with boomers leveraging the significant equity from their existing urban homes. In Ontario and Quebec, this has resulted in exceptional demand and upward pressure on prices. In Western Canada, it has supported demand and stabilized prices.”
Both Ontario and Alberta saw greater aggregate price increases than other provinces, rising 7.2 and 10.2 per cent, respectively. Alberta’s increase was largely due to an 11.4 per cent pickup in the larger market of Canmore, with mostly healthy single digit gains elsewhere in the province.
Royal LePage forecasts the aggregate price of a single-family home in recreational regions in Canada to increase by 4.7 per cent by spring 2020, rising from $411,471 to $429,714.
Most provinces witnessed a year-over-year decline in recreational property sales. While a lack of inventory to meet demand resulted in a sales decline in Ontario, British Columbia’s sluggish sales mirrored trends in the province’s residential real estate market. The exception was Quebec, which experienced a 6.3 per cent year-over-year sales increase in single-family properties in reporting recreational communities as supply met demand.
Buyers looking to Atlantic Canada to purchase a recreational property can expect to find good selection this spring at affordable price points. Over the past year, the aggregate price of a single-family home in reporting recreational regions rose 5.9 per cent to $257,965 compared to the year prior. Waterfront recreational properties in the region are among the most affordable in Canada, with the median price for a waterfront single-family home sitting at $363,335.
“The affordability in the Atlantic region, particularly Halifax, continues to draw Canadians to the area for both recreation and retirement,” stated Marc Doucet, broker of record, Royal LePage Atlantic. “You’d be hard-pressed to find as much variety of recreational homes and unique landscapes.”
Royal LePage is expecting home prices in recreational regions to be stable over the next twelve months. The aggregate price of a single-family home is forecast to rise 0.7 per cent over the next year to $259,671.
Both sales and prices were up in the province’s recreational regions, reflecting the overall health of the economy. The aggregate price for a single-family home in the province’s reporting recreational regions rose 4.5 per cent to $194,315. With a good supply of inventory to meet demand, sales increased 6.3 per cent, well above the national average, which decreased 8.3 per cent.
“Quebecers are benefitting from one of the healthiest economies in the country right now and are confident investing in real estate and long term projects, including recreational property,” explained Dominic St-Pierre, vice president and general manager, Royal LePage, for the Quebec region.
Despite the floods that affected several regions in the province this spring, demand for recreational properties is expected to remain strong, with experts forecasting a 4.4 per cent increase in sales activity over the next twelve months. Over the same period, Royal LePage is forecasting the aggregate price of a single-family home in the province’s recreational region to rise 5.6 per cent to $205,148.
“The increase in sales activity is driven by Quebec’s job market strength, where the unemployment rate in April sat below 5 per cent for the first time since 1976. Salaries continue to rise in the province due to full employment, providing further consumer confidence,” said St-Pierre. “We are also noticing a surge of buyers between the ages of 40 and 60 looking to enjoy the cottage lifestyle and spend more time with the family.”
Although sales are down 7.9 per cent among reporting recreational regions across the province, the aggregate price for a single-family home rose 7.2 per cent to $393,253. The reason most often cited by Royal LePage recreational property experts for the price increase is low inventory, as retirees compete with young families looking to get away from the city.
“In Muskoka, we are seeing people in their 50s and 60s cashing out with significant amounts of money, as well as those who are coming into money and want to get out of the rat race,” said Bob Clarke, sales representative, Royal LePage Lakes of Muskoka. “A 300-foot lot on southern Lake Joe once would be about $1.6 million. Now, if I found one west-facing it would likely be $3.0 million. That puts pressure on 100- and 200-foot lots.”
Demand is high in the province and buyers have not been put off by late spring weather, rain or even flooding. Royal LePage is expecting the aggregate price of a single-family home in the province’s recreational regions to rise a further 8.0 per cent over the next twelve months, rising to $424,905.
Reporting recreational property regions in the Prairies saw softening in both prices and sales over the past year as the aggregate price for a single-family home decreased 6.3 per cent year-over-year to $194,147 and sales dipped 3.4 per cent during the same period. Royal LePage recreational property experts cited the region’s soft economy, which has limited families’ ability to purchase secondary properties, as the primary driver for the decline in both sales and prices.
In Saskatchewan’s popular Christopher Lake, Emma Lake and Candle Lake, the median price of a single-family home decreased 11.7 per cent compared to last year.
“We’ve had an economic downturn in our region, and this has affected lake properties. We are seeing fewer listings, which is creating some balance despite the slowdown in sales,” said Lou Doderai, owner and broker, Royal LePage Icon Realty. “Properties are selling but sellers are waiting a little longer.”
In Manitoba’s Interlake Area, both single-family home prices and sales have remained stable compared to last year as prices remained flat while sales dipped 1.8 per cent.
“Good affordability and proximity to Winnipeg has sustained demand and supported home prices in the region,” said Tyler Bucklaschuk, sales representative and broker, Royal LePage JMB & Associates. “Buyers are seeking access to beautiful lakes while still getting good internet reception and other conveniences. It’s the best of both worlds.”
Royal LePage forecasts single-family home prices in the Prairies’ recreational regions to decrease a further 3.1 per cent to $188,101 over the next year. However, softening prices are expected to spur some activity, and sales may increase over 2.0 per cent for the same period.
Driven by price gains in Canmore, the largest reporting region in Alberta, the aggregate price of a single-family home in recreational regions rose 10.2 per cent to $819,583. The aggregate price in the province is expected to increase 2.4 per cent in 2020.
Although sales in Canmore were flat compared to the same period last year, the median price of a single-family home in the region increased 11.4 per cent year-over-year to $930,000.
“We are seeing good demand in most segments of the market, including retirement, local, and recreational,” said Brad Hawker, broker and owner, Royal LePage Rocky Mountain Realty. “While most buyers already know about the year-round recreational activities and lifestyle, many are surprised to find the area with so many cultural opportunities and how incredibly welcoming Canmore is for new residents of all ages.”
While Canmore saw the largest year-over-year price gains, single-family homes in other reporting regions saw healthy single-digit gains.
Recreational property in British Columbia is showing significant softening compared to last year as sales decreased 22.5 per cent in reporting recreational regions and all regions posting a decrease. While the aggregate price of a single-family home is relatively flat (0.4%) compared to last year, Royal LePage recreational property experts in the region are citing reduced sales volumes in the lower end of the market skewing the median price upwards. Over the next year, the aggregate price is forecast to increase an additional 1.7 per cent in 2020.
“While demand has softened across the recreational property market, low inventory has kept prices stable,” said Gregg Hart, broker and owner of Royal LePage In The Comox Valley. “Mt. Washington had a good snow year and sales on the mountain were well ahead of last year. The inventory on both Denman and Hornby Island is very low, which is pushing prices higher just as the selling season gets going.”
Hart added that there is a good selection of waterfront properties currently on the market in the Valley and most of the buyers have been from the Lower Mainland.
The most popular region for buyers in British Columbia is the central Okanagan region where the median price for a single-family home decreased 3.0 per cent to $640,000 compared to last year.
“While sales are down, buyers from Alberta, Saskatchewan, and Vancouver are still active in the Okanagan region,” stated Mark Walker, sales representative, Royal LePage Kelowna. “Despite a slowdown in the Alberta economy, there are some positives that help offset the challenges we see. Our population is growing, as is the tech sector. And it’s beautiful here.”
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of more than 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.
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