Royal LePage forecasts double digit gain in national recreational house price in 2022, as appreciation is expected to remain strong following a sizzling 27% jump in prices in 2021

Demand continues to outstrip supply in many recreational regions, despite a return to pre-pandemic travel and interest rate increases 

Strong demand for cottages, and properties in close proximity to lakes and mountains, continues to outpace supply in recreational regions across Canada. According to the Royal LePage 2022 Spring Recreational Property Report, the aggregate price of a single-family home in Canada’s recreational market is forecast to increase by 13% in 2022, to $640,710. This is following a 26.6% year-over-year increase in prices last year. 

Even taking into account reduced pandemic-related restrictions, including a return to international travel, and the potential for a series of interest rate hikes over the course of the next two years, experts in recreational regions say the spring market is already off to a competitive start. According to the report, 84% of recreational property experts report lower inventory than last year in their respective regions. 

“The factors challenging Canada’s residential real estate market – chronic low supply and growing demand – are amplified in the recreational property segment,” said Phil Soper, president and CEO, Royal LePage. “Demand for recreational properties continues to vastly outstrip inventory in many cottage regions across the country. Waterfront and mountain-top locations near cities are limited by nature, even in a vast land like Canada, forcing buyers into multiple-offer scenarios. Even more than in urban regions, it is vital that buyers and sellers employ the services of a local agent who has recreational market expertise.”

Highlights from the national release:

• Nationally, the aggregate price of a single-family waterfront property surged 21.5% year-over-year in 2021.
• Single-family homes in Ontario’s recreational property market recorded the highest year-over-year aggregate price appreciation in 2021, rising 34.6%. 
• Quebec and Atlantic Canada expected to see highest recreational property price gains in 2022, rising 15%; single-family recreational homes in Ontario and British Columbia forecast to increase 13% and 12%, respectively.

Ontario

The aggregate price of a single-family home in Ontario’s recreational regions is forecast to increase 13.0 per cent in 2022 to $737,890.

In 2021, the aggregate price of a single-family home in the province’s recreational market increased 34.6 per cent year-over-year to $653,000, compared to 2020; the strongest price appreciation in the country. During the same period, the aggregate price of a single-family waterfront property increased 31.8 per cent to $888,000, while the aggregate price of a condominium increased 20.7 per cent to $496,000.

“Prior to the pandemic, an entry-level property in Muskoka would have cost about $400,000. Today, the same property would not go for less than six- to seven-hundred thousand, and you won’t find many listings like this today. Inventory is at an all-time low,” said John O’Rourke, broker, Royal LePage Lakes of Muskoka. “Today, more than ever before, cottage buyers are using their properties year-round, making them even more valuable. The vast majority of buyers are coming from the GTA and the Golden Horseshoe region, as they can access the area in just a few hours. Over the past two years we have seen a marked increase in full-time residents which helps our local, service-oriented, economy.”

According to a Royal LePage survey of recreational property experts, 84 per cent of respondents in Ontario reported less inventory this year, compared to last year (44% reported slightly less, 40% reported significantly less). Eighty-seven per cent of respondents said at least 75 per cent of the properties sold in their region are selling over the asking price.

“Demand from remote workers has dipped compared to peak demand last year as workers are increasingly heading into the office. However, many buyer hopefuls are still being priced out of the recreational property market in Rideau Lakes,” said Pauline Aunger, broker of record, Royal LePage Advantage Real Estate. “Inventory is extremely thin, and I expect that will continue to be the case through the spring, resulting in further price increases this year. With tight competition and multiple offers on just about every listing, the successful buyers are the ones who are coming prepared.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 37 per cent of boomers in Ontario said they were considering purchasing a primary residence within the next five years. Of them, 56 per cent said they were considering buying in a rural or recreational region, which could result in up to approximately 729 thousand people having entered the recreational real estate market within the five year period.[6]

Royal LePage 2022 Spring Recreational Property Price Forecast and 2021 Price Data Chart (national and regional):rlp.ca/table_2022springrecreationalpropertyreport

For more information and regional insights, read the complete Royal LePage 2022 Spring Recreational Property Report. 

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