Royal LePage is forecasting that Canada’s recreational property markets will see the median price of a single-family home rise by about five per cent annually.
On Wednesday, Royal LePage released its Spring Recreational Property Report, which predicted the increase would bring median prices to $678,930 in 2024, with Ontario seeing the largest price increase at eight per cent. The forecast is based on increased consumer confidence spurring buyers to re-enter the market, the release said.
“Inflation reared its ugly head, interest rates soared and the economic downturn that followed pushed cottage, cabin and chalet prices off those pandemic peaks, yet the fundamental demand for recreational living has not abated. We believe that this market segment will see a resurgence of activity in 2024,” Phil Soper, president and CEO of Royal LePage, said in a press release.
The release also highlighted that a survey of 150 recreational real estate market professionals found that 41 per cent across Canada reported lower inventory compared to last year in their respective regions.
According to Royal LePage, interest rate cuts could spur activity in the recreational property market. The release said that 62 per cent of experts indicated they believe demand will increase slightly in their region following a reduction in interest rates, with 21 per cent saying they expect demand will significantly increase.
“Cash plays a larger role in the purchase of recreational property than with urban homes, yet the vast majority of buyers finance at least part of their purchases,” Soper said.
Other findings from the survey included that 78 per cent of respondents said recreational property buyers typically obtain financing, including a loan or mortgage.
“Recreational property purchases are not as heavily impacted by mortgage rates as those in the residential market. That said, consumer confidence in general will get a boost when we see a cut to the Bank of Canada’s key lending rate, expected later this year,” Soper said.
“This lift in activity will put upward pressure on prices. And, if this coincides with an influx of inventory, we should see a boost in sales as well.”