Recreational property regions in Ontario and beyond are expected to see prices steadily rising by the end of 2024 after a lacklustre 2023, with some provincial cottage areas seeing price gains in the double digits, a new report says.

The Re/Max 2024 Cottage Trends Report forecasts that prices of recreational properties will rise 6.8 per cent in 2024 in Canada, and in Ontario, the forecasted price gains are upwards of 30 per cent in some regions.

The report projected that 72 per cent of Ontario markets will see price gains in 2024 — but that’s after cottage prices fell in 54 per cent of markets in the first quarter of 2024. Southeast Georgian Bay, Honey Harbour and Port Severn, for example, was down 28.7 per cent, while Sudbury was down 16.1 per cent and even Muskoka was down 5 per cent.

The largest price gain in Ontario is expected to be in both Peterborough and The Kawarthas — where prices could increase by 33 per cent by the end of 2024 to $1,194,340 in both regions.

In Haliburton, prices are expected to increase a more modest 6 per cent, to $1,026,922.

Sudbury, Manitoulin & French River and Kenora & Lake of the Woods will see price gains of 5 per cent, to $606,755, $430,071 and $379 945, respectively.

In Muskoka and Grand Bend, the average price will increase by 3 per cent by the end of 2024 — in Muskoka, that means an average price of $1,454,604, and in Grand Bend, that would be $864,660.

The report also found that most cottage owners across the country are opting to hold onto their properties, despite predictions of properties flooding the market thanks to a new capital gains tax policy.

“Those who have already gained a foothold in the recreational property market are determined to hold on to this asset, despite mounting affordability concerns across the country,” Christopher Alexander, president of Re/Max Canada, said. “Even the change to the capital gains tax, that will take effect on June 25, won’t spark a wide-spread flood of new listings and sales by cottage owners trying to get in under the wire given the narrow window.”

Finance Minister Chrystia Freeland proposed an increase in taxes on capital gains in the 2024 federal budget in April, which occur when someone sells — or gifts — their property for more than they bought it. Right now, Canadians are taxed on 50 per cent of that capital gain. As of June 25, the new inclusion rate (the portion of capital gains on which tax is paid) will be two-thirds of all capital gains above $250,000.

The report showed that policies including the capital gains tax and new restrictions on short-term rental bans have not significantly swayed recreational property owners to sell, with 58 per cent choosing to keep their property. 

By comparison, 29 per cent are looking to sell — but the report found the reason for selling was primarily due to the inability to generate the rental income initially anticipated when they purchased their recreational property.

In Ontario, two regions in particular bucked the trend: brokers in Muskoka and Haliburton County have reported a flood of sales compared to other regions in the province.