Prices for Canadian cottages may show a 15% increase in 2021

The recent report by Royal LePage shows that Canadian homebuyers keep preferring country cottages to city properties, following a work-from-home trend. As a result, the prices for recreational properties are growing faster in four key areas.

According to the company’s new forecast, the aggregate cost of a home in areas where Canadians tend to purchase recreational properties (Ontario, Atlantic Canada, Quebec, and B.C.) may go up by 15% in 2021 and reach $503,730.

The report says Ontario and Atlantic Canada will show the largest prices increase for recreational homes by 17% to $547,207 and $226,961, respectively.

“Nationally, the line between primary residence and recreational home is blurring,” – noted Phil Soper, president and CEO of Royal LePage.

He says prices for recreational properties started growing last summer when the pandemic stopped international traveling and many Canadians understood that they could work from anywhere. They only need access to high-speed internet.

“Life during the pandemic has made country living more attractive and desirable than ever,” – Soper said.

“The flexibility of a remote work trend, higher savings from months sitting at home, combined with extremely low interest rates have made Canadians search for larger homes with access to nature, and the ability to achieve the work-life balance.”

A recent Royal LePage’s survey of 190 of its sales representatives shows that 91% of them warned about lack of supply in their areas amid growing demand.

According to the company, restrained supply leads to multiple-offer situations and higher prices.

It turns out that 87% of recreational real estate professionals in Ontario say more than half of homes are selling above their initial price. In case of Quebec and B.C., it’s 65% and 52% respectively.

“The lack of supply and a strong demand seen today at Canada’s housing market are affecting buyers and their agents negatively,” – Soper noted. “Without enough supply, we’ll see home prices keep growing”.