Cottage country is in for a comeback in Ontario this year, with a new report from Royal LePage predicting that single-family home prices in the recreational real estate market will increase by 8 per cent in Ontario in 2024. But the projected increase disguises a tale of two markets between luxury and average properties, a regional cottage expert said.
“Across the province, we’re in a decade low for cottage sales right now, maybe even a 20-year low,” John Fincham, a broker with Re/Max Parry Sound Muskoka Realty, said. “But if you look at the average and median prices that are published, it won’t reflect that because a large portion are luxury cottages that are selling, north of $3 million. That’s keeping those median and average prices elevated.”
The Royal LePage report noted the 2023 single-family recreational property average price is at $613,100, down 5.2 per cent from 2022. The report forecasts the 2024 price to hit $662,148.
But Fincham predicted there will be some price erosion particularly for cottages under $3 million in 2024. “The supply side of the equation is very, very high. The demand side is very, very low,” he said, pointing to the incoming capital gains tax increase as a catalyst for even more inventory in the short term.
But the luxury market? “There will be price stability,” he said. As a realtor in Muskoka, Parry Sound and Haliburton, he noted that the more high-end regions, including the “big three” — Lake Joseph, Lake Rosseau and Lake Muskoka — and Lake of Bays will see stability and possible price appreciation. “The rest of Muskoka is much more vulnerable.”
Overall, Fincham is forecasting a “best case scenario” for the cottage market that is similar to 2023: “Potentially some short term price erosion because of tax changes, and then they’ll level off by the fourth quarter.”
He said for those looking to buy this year, there will be plenty to choose from. “Don’t rush. Take your time. Because of all the new inventory that’s coming in, don’t commit right away, because there’s a lot of good stuff that’s going to be listed next.”
