Canadian recreational house prices soar 11.5% as remote work drives demand in cottage country

  11/30/2020 |   SHARE
Posted in Recreational Properties by Eileen Farrow | Back to Main Blog Page

Vacation Property

According to Royal LePage, year-over-year price appreciation in Canada's recreational property markets soared during the first nine months of 2020, driven by Canadians' ability to work remotely. The aggregate price of a single-family home in Canada's recreational market rose 11.5 per cent to $453,046 and the aggregate price of a condominium rose 9.7 per cent to $280,830. The aggregate price of a waterfront property increased 13.5 per cent to $498,111.

"The pandemic has effected enormous economic and health challenges upon the nation; it has also opened a world of possibility for thousands of Canadians," said Phil Soper, president and CEO, Royal LePage. "On lake and on sea, upon soaring mountain tops and on expansive farmlands, many Canadians are embracing a bold, new work-from-home doctrine: 'I can live anywhere in this huge land.'

"In addition to the new wave of pandemic-era buyers, simple demographics have been buoying the exurban market as more and more of the giant Baby Boom generation retire," Soper continued. "Interest in all types of recreational property is soaring, and I have never seen the number of cottages, cabins, chalets and farmhouses for sale at such a low level relative to demand."

Eighty-four per cent of Royal LePage recreational property experts, representing 53 of Canada's most popular recreational markets, reported an increase in buyers who were interested in working remotely from the property. Fifty-four per cent of regions surveyed reported a significant increase in buyers who sought to purchase a primary residence in a recreational market, enabled by their ability to work remotely.

Recreational property markets also saw an uptick in retiree buyers. While retirees are historically a significant buyer demographic for the recreational property market, the pandemic has spurred demand as retirees advance their plans to improve their quality of life by moving to cottage country. Sixty-eight per cent of regions reported an increase in retiree buyers compared to last year.

As a result of the COVID-19 pandemic, the typically brisk spring market was pushed to late summer and early fall with many regions seeing record-breaking autumn sales. As demand outpaced supply, 86 per cent of the regions surveyed reported less inventory than the previous year.

Nationally, Royal LePage is forecasting that the price of a recreational property in 2021 will increase 8 per cent year-over-year.

Ontario

During the first nine months of the year, the aggregate price of a single-family home in Ontario's recreational property market increased twenty per cent year-over-year to $450,127, while the aggregate price of a waterfront property increased 16.7 per cent to $571,266. The aggregate price of a condominium increased 17.6 per cent to $253,055.

One of Ontario's most sought-after destinations for recreational properties is Muskoka. Bob Clarke, real estate professional, Royal LePage Lakes of Muskoka says the region has been booming for the last several years, and COVID-19 has only amplified that demand.

"Retiring baby boomers have been putting upward pressure on prices and reducing inventory for the last few years. Retirees are now finding themselves competing against remote workers. Both demographics have seen their savings grow through less travel and entertainment during the pandemic," said Clarke. "We are also seeing an increase in current Muskoka owners who are looking to purchase larger properties, as their children have returned after job loss or the ability to work remotely. The most common question used to be 'is the property West-facing?' Now my clients' biggest concern is internet quality."      

Most regions surveyed in Ontario reported an increase in buyers seeking a property where they could work remotely. Seventy-three per cent of the surveyed regions saw a significant increase in buyers seeking to purchase a recreational property as a primary residence. While retirees are historically a sizable demographic of recreational property buyers, 83 per cent of the surveyed regions reported an increase in retirees looking to purchase during the first nine months of 2020 compared to the previous year.

Royal LePage is forecasting that the price of a recreational home in Ontario will increase 10 per cent in 2021.

Source: RLP



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