The sector will particularly benefit from relative stability in interest rates
Royal LePage is anticipating continued robustness in Canada’s winter recreational real estate market, with prices expected to grow by 2.9% over the coming year.
The major driver of the projected increases will be the likely stability, and even decrease, in interest rates.
During the first 10 months of the year, Quebec’s Mont Sutton and British Columbia’s Mount Washington/Comox Valley regions posted the greatest price gains in the single-family detached segment, with annual increases of 27.3% and 26.5%, respectively.
For recreational condos, Mont Sainte-Anne in Quebec registered the greatest year-over-year increase at 83.4%.
“Sharp gains reflect wide range in property styles and price points, and scarcity of inventory,” Royal LePage said.
This is despite a slight cooling in the overall market: Around 24% of Royal LePage recreational property market experts reported declines in buyer demand in 2023 due to climate factors or environmental disasters, particularly considering this year’s extreme wildfire season.
Approximately 41% of experts also reported an increase in inventory stemming from elevated interest rates.
Real estate agents report that the demand for recreational homes has surged since the COVID-19 pandemic began. https://t.co/VVCb9kI71O#mortgage #mortgageinsights #mortgagemarket #housingdemand
— Canadian Mortgage Professional Magazine (@CMPmagazine) April 4, 2023
What drives buyers to the recreational market?
Earlier this year, RE/MAX Canada’s 2023 Cottage Trends Report found that 51% of Canadians who currently own, or plan to own, recreational property are motivated by the notion of passing down property to their next generation.
Another 55% said that they are drawn to the improved quality of life that this asset class represents.
“Demand, coupled with the desire to own and keep these properties in the family, may further impact already low inventory levels in this segment of the market,” said Christopher Alexander, president of RE/MAX Canada.
“When it comes to succession planning, recreational properties are always a good addition to any real estate portfolio, especially given the long-term ROI that they typically yield, making them an excellent opportunity for inheritance aspirations as well.”
