Canada's recreational home prices are projected to increase by 5% in 2024, driven by improved consumer confidence and anticipated interest rate cuts.
As spring arrives and warm weather approaches, Canadians will soon be able to enjoy sunny outdoor weekends and warm days. Leading up to this prime time in the country’s recreational housing markets, it's evident that many potential buyers are expected to make a move to purchase lakeside cabins or countryside cottages this year. This increase in demand will intensify competition for the right supply, driving property prices up.
According to the recently-released Royal LePage® 2024 Spring Recreational Property Report, the median price of a single-family home in Canada’s recreational regions is forecast1 to increase 5.0% in 2024 to $678,930, compared to 2023, as a boost in consumer confidence will bring sidelined buyers back to the market.
“Across the nation there was a sizable rise in demand for all types of housing during the pandemic, but nothing could match the ‘gold rush fever’ that occurred in recreational property markets,”
said Phil Soper, president and CEO, Royal LePage. “With city offices closed and the wide availability of high-speed internet allowing people to take video meetings on lakefronts and mountain tops, excess demand pushed recreational property prices to unprecedented heights.
“Inflation reared its ugly head, interest rates soared and the economic downturn that followed pushed cottage, cabin and chalet prices off those pandemic peaks, yet the fundamental demand for recreational living has not abated. We believe that this market segment will see a resurgence of activity in 2024,” continued Soper.”
In 2023, the weighted median price of a single-family home in Canada's recreational property regions decreased by 1.0% year over year, reaching $646,600. This decline follows a 11.7% decrease in 2022. When looking at specific housing types, the weighted median price of a single-family waterfront property decreased by 7.9% year over year to $1,075,500 in 2023. Similarly, the weighted median price of a standard condominium decreased by 1.5% to $420,300 during the same period.
Could a drop in interest rates heat up buyer activity?
Rising Demand to Propel Prices in Canada's RecreationalBased on a survey of 150 Royal LePage recreational real estate market professionals nationwide, 41% noted a decrease in inventory compared to the previous year, while 33% reported similar inventory levels. Despite this, 64% reported steady or increased demand from buyers for recreational homes. This sustained and increasing demand for a limited supply of properties is anticipated to drive prices up in Canada's recreational market.
Rising Demand to Propel Prices in Canada's Recreational
Sixty-two per cent of experts said they believe demand will increase slightly in their region when interest rate cuts are made, while 21% expect demand will increase significantly.
“Recreational property purchases are not as heavily impacted by mortgage rates as those in the residential market. That said, consumer confidence in general will get a boost when we see a cut to the Bank of Canada’s key lending rate, expected later this year. This lift in activity will put upward pressure on prices. And, if this coincides with an influx of inventory, we should see a boost in sales as well,” concluded Soper.
Highlights from the release:
All of Canada's provincial recreational markets expected to see an increase in single-family home prices in 2024, with Ontario forecast to see the highest level of price appreciation at 8.0%
Condominiums in Atlantic Canada's recreational property market recorded the highest provincial year-over-year weighted median price appreciation in 2023, rising 16.9%
Despite a modest decrease over the past year, the national weighted median single-family home price in Canada's recreational real estate market remains 59% above 2019 levels
In conclusion, Canada's recreational home prices are projected to increase by 5% in 2024, driven by improved consumer confidence and anticipated interest rate cuts. The market is expected to see a surge in demand as buyers seek out lakeside cabins and countryside cottages, intensifying competition and driving prices upward. Despite fluctuations in pricing in recent years, the fundamental demand for recreational living remains strong, and experts believe the market will see a resurgence of activity in the coming year. Overall, all provincial recreational markets are expected to experience price increases, with Ontario leading the way with an 8.0% forecasted appreciation.
If you’re considering buying or selling a home, don’t hesitate to contact Royal LePage Estate Realty. Our experienced real estate agents are here to help you navigate the market and make informed decisions. Contact us today to get started on your real estate journey!
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Written by Anne-Elise Cugliari Allegritti – Director of Communications, Royal LePage.
1Royal LePage’s national and provincial forecasts are weighted medians based on a weighted model using sales in each region. Methodology is consistent with previous reports, which used the label ‘aggregate’.
2Royal LePage’s national and provincial weighted median home prices are based on a weighted model using sales in each region. Methodology is consistent with previous reports, which used the label ‘aggregate’.
3A national online survey of 150 brokers and sales representatives serving buyers and sellers in Canada’s recreational property regions was conducted between February 24, 2024, and March 12, 2024.
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