Cottage housing market to see price decline: Royal LePage
According to a recent report by Royal LePage, Canadian cabin and cottage prices are expected to fall this year as demand softens from economic uncertainty and low housing stocks.
Royal LePage Recreational Facility Report, release on tuesdayexpects total single-family home prices in the Canadian recreational housing market to fall 4.5% this year compared to 2022 to $592,005.
Royal LePage total home prices are based on median prices including single family homes, waterfront single family homes and standard condominium homes.
“Despite a slight decline this year, after two years of double-digit price gains in the domestic recreational property market, total national prices will remain more than 32% above 2020 levels. ‘ said the report.
While Quebec and Ontario are expected to see the biggest price declines of 8% and 5% year-over-year respectively, the report presents a more hopeful outlook for Alberta.
The state is expected to be the only region in the country where recreational housing prices will rise by 0.5% this year.
This is all after the total price jumps 11.7% year-over-year to $619,900 in 2022. In 2021, prices increased by 26.6% year-on-year.
Royal LePage President and CEO Phil Soper said in the report:
Soper said higher interest rates would have less of an impact on recreational housing given that buyers tend to put in more money and borrow more. Earlier this month, the Bank of Canada said it would keep interest rates at 4.5% after March 2022 and its continued rise.
But while general consumer inflation and inventory shortages are “restraining sales activity,” recreational homebuyers tend to enjoy the “time boon” of finding suitable properties, he said. says. “Call it want versus need.”
Full-time cottage living loses its ‘romantic sparkle’
An online survey of 202 Royal LePage recreational property brokers and sales representatives conducted March 1-18 found that 57% reported lower inventory than last year. I was.
An even higher 65% say they have fewer inventories than they did pre-pandemic.
“While low inventory has been a challenge for buyers looking for that exclusive cabin or lakeside cottage, at the same time reduced demand has returned to more normal market conditions,” the report said. has said.
The same study also looked at cases where people moved and lived full-time in recreational facilities during the COVID-19 pandemic.
Twenty-eight percent of those surveyed said the tendency to move back to urban or suburban areas has become “somewhat common” after migration.
However, 56% say it’s rare in their market.
People surveyed in Atlantic Canada were most likely to say that this trend has become somewhat more common, at 46%.
“During the pandemic, offices were closed and people were working from home, but Canadians found recreational facilities could also serve as primary residences with capital gains exempt status. Did.
“With high-speed internet now readily available in many rural markets, families are creating extra space between themselves and their neighbors, especially when cultural and sporting venues, shops and restaurants in cities are closed. They flocked to recreational areas to secure space and take advantage of nature.
“Many urban businesses now require employees to be in the office at least a few days a week, making long commutes difficult. Living in has lost its romantic luster, which means we’re back to looking at cottages: cabins and chalets for weekends and summer escapes from city life.”
The Royal LePage Recreational Property Report is a compilation of insights, data and forecasts from 50 markets. Median data were compiled and analyzed by Royal LePage for the periods 1 January 2022 to 31 December 2022 and 1 January 2021 to 31 December 2021. Each region surveyed. Royal LePage gross home prices are based on a weighted model using the median. Data availability is based on transaction thresholds and whether regional data is available using standard housing types for reporting. Total prices are subject to change from previous reports due to changes in the number of participating regions.