Buying cottage country real estate is the newest fad sweeping Canada. But if you want to make that dream a reality, you’ll have to be willing to shell out some serious cash.
According to the spring report released by real estate company Royal LePage, the price of recreational properties is forecasted to rise in every province across Canada, turning the whole country into a seller’s market.
If you’re looking to buy or sell a cottage in the near future, here are the eight insights you need to know:
1. Canadian cottage prices forecast to rise in 2021
Royal LePage forecasts an increase in recreational property prices in every province across the country. According to the report, the aggregate price of a house in Canada’s cottage country is forecast to increase by 15 per cent in 2021 to $502,730.
“Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada,” said Phil Soper, president and CEO of Royal LePage, in the report. “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.”
Check out the hottest cottage real estate markets here.
2. Canada’s waterfront property prices increased in 2020
While it should come as no surprise considering the current trajectory of Canada’s real estate market, the price of a waterfront property saw a jump over the last year. The aggregate price of a waterfront property in Canada’s cottage country increased 9.8 per cent to $813,385 in 2020 from $741,135 in 2019.
3. Ontario and Atlantic Canada forecasted to see highest price increase in 2021
The highest forecasted price increase is expected to happen in Ontario and Atlantic Canada, with both set to see a 17 per cent jump.
In the Maritimes, the aggregate price for a recreational property is expected to reach $226,961 in 2021. “Supply is the lowest it’s been in a long time, leading to a highly competitive market and often resulting in multiple-offer scenarios,” said Kirk Richards, sales representative for Royal LePage Atlantic, in the report. “While I do expect to see a lift in supply this spring, it will likely not be enough to satisfy growing demand.”
Ontario will see a similar jump as its aggregate recreational property prices are forecasted to reach $547,207 in 2021. “A scarcity of inventory added more fuel to the fire, creating competition in the market unlike anything we’ve seen before,” said John O’Rourke, a broker for Royal LePage Lakes of Muskoka, in the report.
4. Alberta forecast to see lowest price increase in 2021
Alberta is forecast to see the lowest increase in price for a recreational property at six percent. But this may be due to the fact that Alberta already has the highest average prices of any province in Canada. The aggregate recreational property price in Alberta is expected to reach $942,881 in 2021.
According to the report, Alberta’s recreational property prices are skewed due to Canmore, owing to its proximity to Banff National Park and its luxury mountain properties. “Canmore is seeing unparalleled demand from people wanting to accelerate their life plans and focus on their physical and mental health,” said Brad Hawker, managing broker for Royal LePage Rocky Mountain Realty, in the report. “We’ve seen a growing segment of young and middle-aged buyers seeking primary residences in the area.”
5. Atlantic Canada reports most affordable recreational properties
Despite being forecast to have the highest price increase of any area in the country (aside from Ontario), Atlantic Canada still has the most affordable cottage prices. The aggregate price of a house in the Maritimes’ cottage country increased from $172,767 in 2019 to $193,984 in 2020. And the price of a waterfront property increased from $214,896 in 2019 to $255,222 in 2020.
6. Cottage inventory is limited across the country
According to the report, 91 per cent of Royal LePage real estate professionals surveyed said that their market has less inventory than is typical for their respective regions. This is causing properties to receive multiple offers, resulting in them selling above asking price. In Ontario, 87 per cent of real estate professionals said that more than half of the properties available are selling above asking price.
“The low inventory, high demand scenario that is defining Canada’s current real estate landscape can be frustrating for buyers and their agents,” said Soper, in the report. “Without enough supply to meet demand, prices continue to increase at above normal rates. And with so few listings to choose from, owners are concerned they will have nowhere to go if they sell before buying, so they hesitate to list. This cycle makes it difficult for anyone to move ahead.”
7. Increase in out-of-province buyers in Western and Atlantic Canada
Sixty-eight per cent of real estate professionals in B.C. and 100 per cent of professionals in the Maritimes reported seeing an increase in inter-provincial buyers over the last year.
“Sight-unseen purchases in Shediac [N.B.] are becoming more prevalent today,” said Heather FitzGerald, real estate professional for Royal LePage Atlantic, in the report. “Most out-of-province buyers are coming from Ontario, Quebec and B.C. Some are retirees returning home or fulfilling the dream of a vacation home in the Maritimes, while others are young professionals who have chosen a waterfront cottage as their primary residence. Working remotely has afforded them that opportunity.”
8. Millennials make up an active segment of cottage real estate buyers
Retirees are not the only ones snapping up cottages. According to the report, 47 per cent of Canadians aged 25 to 35 would choose to live in a small town or the country when given the choice. Of that same demographic, 63 per cent said the ability to work remotely is important to them, and 39 per cent said they are considering a move from their current home to a less dense area due to the pandemic.
“According to our research, access to high-speed internet and the ability to work remotely are among the top criteria for those seeking properties in Canada’s recreational regions, followed closely by four-season usability,” said Soper, in the report. “There is no doubt the pandemic has had an impact on our lifestyle, but also our mindset. The more time Canadians spend in their homes, the more apparent their needs and priorities become.”
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