Price Boost Expected in Canada’s Cottage Country

Explore the findings of the recent Royal LePage report indicating a potential increase in prices for cottage properties in Canada's popular cottage country destinations.

As spring arrives in Canada, many are considering the possibility of purchasing a cottage or cabin. However, a recent report from Royal LePage suggests that proper budgeting may be necessary before making such a decision. The report, released on Wednesday, indicates that the recreational real estate market could be on the verge of a revival, with the national median house price expected to rise by approximately five per cent.

Price Boost Expected in Canada's Cottage Country | Royal LePage Report

Inflation has been on the decline, dropping to 2.8 per cent in February, which has surprised economists and raised the potential for growth in both the housing market and recreational property sector. In 2020, a previous Royal LePage report revealed that the prices of recreational homes had increased by 11.5 per cent to an average of $453,046 in the first nine months of the year. This surge in prices was attributed in part to a decrease in supply due to a rise in demand.

A survey of 150 Royal LePage recreational real estate professionals conducted earlier this year found that 41 per cent reported a decrease in inventory compared to the same period in 2023. However, 64 per cent noted that demand remained steady or had even increased. The combination of low inventory and high demand could lead to a rise in prices, particularly in regions such as Atlantic Canada, British Columbia, and Ontario, where price jumps of 4.5, five, and eight per cent, respectively, are expected.

Terry Rees, the executive director of the Federation of Ontario Cottagers’ Association, expressed skepticism about the possibility of a significant rebound in pricing, although he acknowledged that certain areas may experience price increases. A report from ReMAX Canada last year revealed that while demand for cottages remained strong, first-time buyers were hesitant to enter the market due to economic uncertainty. In fact, 69 per cent of Canadians surveyed indicated reluctance to invest in a cottage under such conditions.

The Royal LePage report suggests that buying activity in the recreational real estate marketcould intensify if interest rates were to decrease, potentially leading to further growth in the sector.

The outlook for the recreational real estate market in Canada appears to be positive, with the potential for price increases in the coming months. Proper budgeting and consideration of market conditions will be essential for those looking to purchase a cottage or cabin in the near future.