Cottage country is in for a comeback across Canada this year, and Ontario is predicted to see the largest surge. A new report from Royal LePage found that single-family home prices in the recreational real estate market will increase by 8 per cent in Ontario and 5 per cent in Canada in 2024.
Cottages, cabins and chalets in Canada saw an unprecedented “gold rush fever” during the pandemic, according to Royal LePage president and CEO Phil Soper, as remote work made lakefront Zoom meetings an enticing possibility. But as the nature of the pandemic shifted and demand declined, so did prices — the weighted median price of a single-family home in Canadian recreational property regions dropped 11.7 per cent year-over-year in 2022 and another 1 per cent in 2023.
In Ontario, prices dropped 5.2 per cent year-over-year in 2023, the highest decline in Canada during that period. The effect was even more pronounced for waterfront properties — the median price of single-family waterfront properties dropped 8.2 per cent. Cottage country condos in Ontario saw less of an impact, with a 2.6 per cent decline from 2022 to 2023.
But with interest rate cuts on the horizon and low inventory from the pandemic years, experts are anticipating a “boom” in cottage country. “Sidelined buyers sense an impending drop in interest rates, and are slowly moving back into the market. Sellers have adjusted their expectations away from high pandemic-era prices and are becoming increasingly motivated to sell,” said Pauline Aunger, broker of record at Royal LePage Advantage Real Estate. “We anticipate an active spring market as buyers continue to adjust to the current interest rate environment and move forward with their real estate purchase plans.”
Currently, the single-family recreational property price in Ontario stands at $613,000. With a predicted 8 per cent increase, Royal LePage is forecasting a price of $662,148 for 2024.
If waterfront properties in Ontario see a similar increase, the median price could increase to just over $1 million from its current price of $934,000.
“Although sales volume is down on an annual basis, we have seen an increase in activity in the high-end segment of the market, especially in the $8-million-and-up market,” said John O’Rourke, broker at Royal LePage Lakes of Muskoka. ““We expect an uptick in supply over the coming months, which will give eager buyers more selection. Although Muskoka attracts wealthier buyers who are less impacted by interest rate changes, a drop in borrowing costs could still ramp up market activity later this year.”
While Ontario is certainly leading the way for price increases in 2024, there is anticipated price growth for all provincial areas this year, including 5 per cent in British Columbia, 4.5 per cent in Atlantic Canada and 4 per cent in Alberta.
