Rising Canadian Cottage Prices in 2024: ReMax Predicts 6.8% Increase

In 2024, recreational property prices are expected to rise as Canadian cottage owners choose to hold onto their properties despite concerns over interest rates, affordability, and recent tax changes. According to ReMax's Canada Cottage Cabin Trends Report, recreational property prices are projected to increase by 6.8 per cent this year. Surprisingly, the majority of Canadian cottage owners (64 per cent) are not considering selling their properties, even in light of the new capital gains rules announced in the federal budget.

ReMax noted that there has not been a surge of listings in Canada's recreational property market this spring, and it is unlikely to occur this year. The report took into consideration the challenges posed by interest rates and affordability, as well as the federal government's decision to raise the capital gains tax on annual amounts exceeding $250,000. This change has led to speculation that cottage owners may rush to put their properties up for sale before the June 25 deadline.

Despite a slight increase in listings, the report found that for most owners, the lifestyle benefits and potential for future returns on investment outweigh the impact of the upcoming tax changes. Even with the impending change to the capital gains tax, ReMax does not anticipate a widespread rush of new listings and sales by cottage owners trying to beat the deadline. However, there have been reports of an uptick in listings in some regions by RE/MAX brokers and agents.

In addition to the revised capital gains calculations, some provinces have imposed restrictions on short-term rentals. However, these limitations have not significantly influenced the decision of recreational property owners to sell. The report revealed that 58 per cent of those who purchased with the intention of renting have chosen to retain their properties, with only 29 per cent considering selling, mainly due to the inability to generate the anticipated rental income.

Certain areas in Western Canada, such as Central Alberta, Sylvan Lake, and Canmore, are witnessing an increase in properties for sale, while prices are fluctuating in other regions. In British Columbia, average prices for recreational properties have risen in popular destinations like Whistler but have declined in places like Ucluelet. Looking ahead, ReMax predicts that prices will trend upwards in most regions it covers.

In Ontario, markets in Muskoka and Haliburton County remain active, with families being the primary buyers. In Atlantic Canada, many regions are experiencing a seller's market, except for Charlottetown, which is more balanced. Prices have risen in some markets, such as Northern Nova Scotia, but have decreased in others, like St. John's. The report concludes that strong demand and limited inventory will continue to support the market through the summer and into the winter.