Yahoo Finance Canada real estate: Cottage market expected to bounce back in 2024, says Royal LePage
Canada’s recreational housing market is expected to rebound this year, according to a new report released by Royal LePage, with prices set to increase by 5 per cent on average in 2024.
After demand levelled off following a peak reached in the COVID-19 pandemic, Royal LePage says the median price of a single-family home in Canada’s recreational market is set to rise 5 per cent to $678,930 this year. The forecast is based on predictions from the company’s network of recreational real estate market experts, using a weighted model based on sales in each region.
With demand starting to recover, and expectations that a future Bank of Canada interest rate cut will lead to a resurgence in home sales, Royal LePage CEO Phil Soper says “we believe that this market segment will see a resurgence of activity in 2024.”
“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,” Soper said in a statement.
“Demand has been building quietly on the sidelines. Our regional experts tell us that buyer interest is steadily ramping up as the spring market approaches. With hybrid office and work-from-home business models being the norm now, many working people see the opportunity to make much better use of country properties.”
According to the report, Ontario is set to see the biggest percentage increase in the recreational market, with prices expected to jump 8 per cent to a median price of $662,148 in 2024. In 2023, the price of a single-family home in Ontario's recreational market decreased 5.2 per cent to $613,100, while waterfront properties fell 8.2 per cent to $934,000. John O'Rourke, a broker with Royal LePage Lakes of Muskoka, says lower levels of inventory have dampened the market, but that an uptick in supply is expected in the coming months.
Cottage prices in British Columbia are expected to increase 5 per cent in 2024, to a median of $1.14 million, while prices in Alberta are set to rise 4 per cent to $1.29 million. Atlantic Canada’s recreational market is expected to see prices increase 4.5 per cent, to a median of $288,002, and Quebec will see a 2 per cent increase, with prices hitting $404,838. The Prairie market is forecast to increase by a more modest 0.5 per cent, with median prices reaching $286,928.
The expected rebound comes after a slowdown in demand following the pandemic. Last year, the median price of a single-family home in recreational markets fell 1 per cent to $646,600, after a nearly 12 per cent drop in 2022.
Royal LePage says demand has started to return. According to a survey of 150 brokers and sellers across Canada’s recreational markets, 64 per cent say they have seen similar or more demand from buyers compared to last year. At the same time, 41 per cent of respondents reported less inventory compared to 2023, something that the company says will result in upward price pressures.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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