A report released Tuesday by real estate firm RE/MAX finds that Canadian cottage owners choosing to hold on to properties, despite interest rates and affordability concerns.
The report said 64 per cent of Canadian cottage owners have decided not to sell this year.
When it comes to a recreational property purchase, half of Canadians prioritize affordability (46 per cent, up from 43 per cent in 2023), followed by proximity to water (35 per cent), and necessary amenities (27 per cent), said RE/MAX.
FULL PRESS RELEASE
TORONTO, April 30, 2024 /CNW/ — A flood of listings hasn’t hit Canada’s recreational property market this spring, and is unlikely to transpire this year, according to insights from RE/MAX Canada’s 2024 Cottage Trends Report. Despite the affordability challenges and higher interest rates that characterized the 2023 real estate market, Canada’s cottage owners are choosing to hold on to their properties in 2024 rather than selling off – a trend that’s likely influenced by the desirable quality of life alongside the prospect of future returns on recreational property ownership. Looking ahead, RE/MAX brokers and agents in Canada are anticipating an increase in recreational prices by 6.8 per cent. Meanwhile, the number of sales is expected to rise in the majority of regions analyzed (61.9 per cent), increasing between three per cent upwards of 50 per cent this year.
Demographic shift in the market
According to RE/MAX brokers and agents, families and young couples have become a significant driver of activity in 59 per cent of recreational markets across Canada. Historically, sales have primarily been propelled by retirees, who were the dominant demographic in 91 per cent of markets analyzed by RE/MAX in 2018.
This shift can be attributed to the lifestyle and flexibility afforded by hybrid and remote work. According to a Leger survey commissioned as part of the report, the quality of life found in recreational markets, and the ability to work remotely, have prompted more than one third of Canadian recreational property owners (38 per cent) to spend more time at these secondary properties than they did before the pandemic. The rate is higher among younger buyers: 55 per cent among Gen Z (ages 18-24), and 57 per cent among Millennials (ages 25-39).
To view the full report, please click here.
“Years of research* have shown that Canadians consistently see value in real estate ownership – both as a necessity and an investment. 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,” says Christopher Alexander, President, RE/MAX Canada.
“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,” continues Alexander. “That said, RE/MAX brokers and agents in some regions have reported a recent uptick in listings that may be tied to the new change, it could also prompt some Canadians to have estate planning discussions earlier, so work with an experienced, local real estate agent, who can advise you of current conditions in your given market.”
Recreational market policy and regulation influences
In an effort to improve the availability of housing supply, short-term rental bans have begun to materialize in some provinces across the country, while others look to introduce new measures to limit allowances. In the wake of this, the Leger survey commissioned by RE/MAX found that these restrictions have not swayed recreational property owners to sell, with 58 per cent remaining steadfast in their investment. By comparison, only 29 per cent are looking to sell, due to the inability to generate the rental income initially anticipated when they purchased their recreational property.
Canadians are split on whether these policies have made buying and selling more complicated, and whether they’ll buy/sell as a result (35 per cent say they won’t; 31 per cent say they will).
Regional Deep Dive into Canadian Recreational Markets
RE/MAX Canada brokers and agents were asked to provide an analysis of their local market activity for the first quarter of 2024, as well as an outlook for the rest of the year. Overarching regional trends pinpointed by the RE/MAX network include:
- Families and couples are the primary drivers of activity in the recreational property market –82 per cent and 68 per cent respectively, retirees at 59 per cent, and investment buyers at 41 per cent .
- 54.5 per cent of regions in Western and Atlantic Canada have experienced increased inter-provincial migration activity, while Ontario witnessed increased intra-provincial migration activity.
To view the regional data table, click here.
Market | Average Residential | YoY Percentage | Number of | YoY Percentage | Year- | Year-End 2024 | Year- | Market Type | ||||
Q1 2023 | Q1 2024 | (+/-) | January 1- | January 1 – | (+/-) | (+/-) % | $ | (+/-) % | Sellers/Buyers/Balanced | |||
Whistler, BC | $1,633,855 | $1,756,473 | 7.5 % | 114 | 117 | 2.6 % | N/A*** | N/A*** | N/A*** | Balanced | ||
Tofino, BC***** | Not enough data | $1,001,116 | N/A** | 0 | 3 | N/A** | -10.0 % | $901,004 | -10.0 % | Buyer’s | ||
Ucluelet, BC***** | $764,000 | $676,703 | -11 % | 6 | 6 | 0.0 % | 10.0 % | $744,373 | 10.0 % | Buyer’s | ||
North Okanagan, BC | $835,193 | $739,000 | -12 % | 15 | 14 | -6.7 % | 2.0 % | $753,780 | 5.0 % | Balanced | ||
Edmonton Lakes, AB | $388,772 | $477,104 | 22.7 % | 18 | 23 | 27.8 % | 5.0 % | $500,959 | 3.0 % | Balanced | ||
Canmore, AB | $962,619 | $1,040,422 | 8.1 % | 101 | 121 | 19.8 % | 10.0 % | $1,144,464 | 5.0 % | Seller’s | ||
Sylvan Lake and Central Alberta, AB | $580,357 | $666,949 | 14.9 % | 40 | 37 | -7.5 % | 5.0 % | $700,296 | -3.0 % | Seller’s | ||
Muskoka, ON | $1,487,265 | $1,412,237 | -5.0 % | 46 | 45 | -2.2 % | 3.0 % | $1,454,604 | 5.0 % | Balanced | ||
Haliburton County, ON | $816,112 | $968,794 | 18.7 % | 24 | 34 | 41.7 % | 6.0 % | $1,026,922 | 8.0 % | Balanced | ||
Peterborough, ON | $465,000 | $898,000 | 93.1 % | 1 | 9 | 800.0 % | 33.0 % | $1,194,340 | 50.0 % | Buyer’s | ||
The Kawarthas, ON | $465,000 | $898,000 | 93.1 % | 1 | 9 | 800.0 % | 33.0 % | $1,194,340 | 50.0 % | Buyer’s | ||
Southeast Georgian Bay, Honey | $1,272,917 | $906,967 | -28.7 % | 4 | 9 | 125.0 % | N/A*** | N/A*** | N/A*** | Buyer’s | ||
Lake Huron Area (Bayfield and Goderich), ON | $730,507 | $672,690 | -7.9 % | 35 | 30 | -14.3 % | -5.0 % | $639,056 | -10.0 % | Balanced | ||
Sudbury, ON | $688,750 | $577,862 | -16.1 % | 8 | 7 | -12.5 % | 5.0 % | $606,755 | 0.0 % | Seller’s | ||
Manitoulin & French River, ON | $396,241 | $409,591 | 3.4 % | 29 | 47 | 62.1 % | 5.0 % | $430,071 | 20.0 % | Seller’s | ||
Simcoe County, ON | $1,800,000 | $1,983,333 | 10.2 % | 6 | 9 | 50.0 % | 0.0 % | $1,983,333 | 20.0 % | Balanced | ||
Grand Bend, ON | $912,135 | $839,476 | -8.0 % | 26 | 29 | 11.5 % | 3.0 % | $864,660 | 15.0 % | Buyer’s | ||
Kenora & Lake-of-the-Woods, ON | $389,066 | $361,852 | -7.0 % | 19 | 16 | -15.8 % | 5.0 % | $379,945 | 15.0 % | Seller’s | ||
St. John’s, NL**** | $354,000 | $321,750 | -9.1 % | 4 | 8 | 100.0 % | 18.0 % | $379,665 | 6.7 % | Seller’s | ||
Cape Breton, NS | $260,686 | $276,982 | 6 % | 98 | 76 | -22.4 % | 8.0 % | $299,141 | -15.0 % | Seller’s | ||
Northern Nova Scotia, NS | $223,433 | $351,958 | 57.5 % | 15 | 13 | -13.3 % | 5.0 % | $369,556 | 10.0 % | Seller’s | ||
Charlottetown, PEI | $275,000 | $275,000 | 0 % | 15 | 8 | -46.7 % | 0.0 % | $275,000 | 0.0 % | Balanced | ||
Annapolis Valley, NS | $229,428 | $119,750 | -48 % | 7 | 4 | -42.9 % | 5.0 % | $125,738 | -15.0 % | Seller’s | ||
*The outlooks for 2024 are estimates provided by RE/MAX Canada brokers and realtors. Each RE/MAX office is independently owned and operated. | ||||||||||||
Western Canada
Compared to 2023 market conditions, Central Alberta, as well as Sylvan Lake and Canmore continue to favour sellers, while Edmonton Lakes is experiencing a more balanced market Whistler, British Columbia is also gaining balance, with an eight-per-cent listings-to-sales ratio for single-family homes, compared to 30-per-cent listings-to-sales ratio for affordable condominiums. Tofino and Ucluelet on the other hand, have shifted from a balanced market to a buyer’s market.
Similar to 2023, retirees are driving recreational property sales (notably in Canmore, Edmonton Lakes and Central Alberta) followed by families (in Canmore, Central Alberta, Tofino and Ucluelet), couples (in Edmonton Lakes, Central Alberta, Tofino and Ucluelet) and investment buyers (in Canmore, Central Alberta, Tofino and Ucluelet). Favoured amenities among buyers in these regions include access to recreational activities (most notably in Canmore, Edmonton Lakes, Central Alberta, Whistler, Tofino and Ucluelet), followed by functional WiFi access (in Edmonton Lakes, Central Alberta, Whistler, Tofino and Ucluelet), proximity to water (in Edmonton Lakes and Central Alberta), close-knit communities (in Tofino and Ucluelet), and swimming pools (in Canmore and Whistler).
Year-over- year, 83 per cent of regions in Western Canada experienced an increase in average recreational sale prices, including Whistler (+7.5 per cent, from $1,633,855 in Q1 of 2023 to $1,756,473 in Q1 of 2024); Tofino (+100 per cent from $0 in Q1 in 2023 due to no available inventory, to $1,001,116 in Q1 of 2024); Edmonton Lakes (+11.8 per cent, from $639,750 in Q1 of 2023 to $715,300 in Q1 of 2024**); Canmore (+8.1 per cent, from $962,619 in Q1 of 2023 to $1040,422 in Q1 of 2024); and Sylvan Lake and Central Alberta (+14.9 per cent, from $580,357 in Q1 of 2023 to $666,949 in Q1 of 2024). Meanwhile, Ucluelet experienced a decrease in sales price (-11 per cent, from $764,000 in Q1 of 2023, to $676,703 in Q1 of 2024).
According to RE/MAX brokers’ outlook for the remainder of the year, Western Canada regions could see average price increase between five and 10 per cent, as demand continues to grow. Average recreational sale prices are expected to increase by five per cent in Edmonton Lakes, Sylvan Lake and Central Alberta, 10 per cent in Canmore, and 10 per cent in Ucluelet. On the flip side, Tofino is anticipating a 10-per-cent decrease in sales prices due to regional limitations on short-term rentals this year, which is prompting some recreational property owners to divest themselves of their properties or convert them into primary residences.
Four out of the 6 regions analyzed in Western Canada have recorded a sales increase in the first quarter of the year, including Whistler (+2.6 per cent, from 114 in Q1 of 2023 to 117 in Q1 of 2024); Tofino (+300 per cent, from zero sales in Q1 of 2023 to three in Q1 of 2024); Edmonton Lakes (+27.8 per cent, from 18 in Q1 of 2023 to 23 in Q1 of 2024**); and Canmore (+19.8 per cent, from 101 in Q1 of 2023 to 121 in Q1 of 2024). Meanwhile, sales in Ucluelet have held steady year-over-year (six in Q1 of 2023, and six in Q1 of 2024), while Sylvan Lake and Central Alberta experienced a decrease in sales (down eight per cent, from 40 in Q1 of 2023 to 37 in Q1 of 2024), as a direct result of inventory shortages.
Much in line with the Leger survey data, brokers in Western Canada, with the exception of Tofino, also reported that recreational property owners continue to hold onto their properties and aren’t offloading as a result of affordability. Sales decisions are more likely being driven by downsizing and aging out of the property.
Ontario
Similar to RE/MAX report findings in 2023, there’s a nearly even split among Ontario markets analyzed that are favouring buyers (Grand Bend, Peterborough, The Kawarthas and Southeast Georgian Bay, Honey Harbour and Port Severn), sellers (Sudbury, Manitoulin, French River and Kenora/Lake-of-the-Woods) or experiencing balanced conditions (Muskoka, Haliburton County and Simcoe County). While most Ontario recreational property owners are holding onto their cottages, even amid affordability challenges, RE/MAX brokers in regions such as Muskoka and Haliburton County – two of the most popular cottage markets in the province – have reported a flood of sales, compared to other Ontario regions.
Demand for cottages in Ontario is driven primarily by families in nearly all markets surveyed, with the exception of Grand Bend. This is followed by young couples (in 63 per cent of markets including Muskoka, Haliburton County, Peterborough and The Kawarthas, Southeast Georgian Bay, Honey Harbour, Port Severn, Lake Huron Area (Bayfield, and Goderich)) and Kenora/Lake-of-the-Woods); and retirees (in 54 per cent of markets including Peterborough and The Kawarthas, Southeast Georgian Bay, Honey Harbour and Port Severn; Grand Bend, Lake Huron Area (Bayfield and Goderich) and Kenora and Lake-of-the-Woods).
While out-of-province buyers are an increasing trend in recreational markets in Atlantic Canada and Alberta, Ontario’s cottage buyers are generally local to the province, with the exception of Kenora and Lake-of-the-Woods, which sees interprovincial buyers primarily from Manitoba, due to its proximity to the neighbouring province.
When it comes to amenities, waterfront properties are in highest demand in Ontario, followed by properties with lots of outdoor and green space, and good Wi-Fi access.
Year-over-year, 54 per cent of Ontario’s cottage markets saw average prices decline between five and 28.7 per cent, including Muskoka (down five per cent, from $1,487,265 Q1 2023 to $1,412,237 in Q1 2024); Kenora and Lake-of-the-Woods (down seven per cent, from $389,066 in Q1 2023 to $361,852 in Q1 2024); Grand Bend (down eight per cent, from $912,135 in Q1 2023 to $839,476 in Q1 2024); Sudbury (down 16.1 per cent, from $688,750 in Q1 2023 to $577,862 in Q1 2024); and Southeast Georgian Bay, Honey Harbour and Port Severn (down 28.7 per cent, from $1,272,917 in Q1 2023 to $906,967 in Q1 2024).
Meanwhile, regions that experienced price increases include Manitoulin & French River (up 3.4 per cent, from $396,241 Q1 of 2023 to $409,591 in Q1 2024); Simcoe County (up 10.2 per cent, from $1,800,000 in Q1 2023 to $1,983,333 in Q1 2024); Haliburton County (up 18.7 per cent, from $816,112 in Q1 2023 to $968,794 in Q1 2024); and most notably, Peterborough and The Kawarthas (up 93.1 per cent, from $465,000 in Q1 2023 to $898,000 to Q1 2024).
RE/MAX brokers and agents in Ontario are anticipating cottage prices to increase in 72 per cent of recreational markets by the end of 2024, to the tune of up to 33 per cent. The outlier is Simcoe County, where prices are expected to stay level due to the interest rate climate.
On the sales side, some Ontario markets are showing promise, with significant year-over-year increases in the first quarter of 2024. Sales in Grand Bend were up 11.5 per cent (from 26 sales in 2023 to 29 in 2024); up 41.7 per cent in Haliburton County (24 sales in 2023 to 34 in 2024); up 50 per cent in Simcoe County (six sales in 2023 to nine in 2024); and up a whopping 800 per cent in Peterborough and The Kawarthas (from one sale in 2023 to nine in 2024). The sales outlook for the remainder of the year remains focused on growth in all regions surveyed, with an anticipated year-end sales increase of between three to 50 per cent, except for Sudbury, which is anticipating prices to remain steady.
Atlantic Canada
The majority of recreational markets in Atlantic Canada (80 per cent) are currently experiencing seller’s market conditions, including St. John’s, NL, and Nova Scotia’s Annapolis Valley, Cape Breton and northern regions. This has remained consistent since 2023. In contrast, Charlottetown, PEI is experiencing a balanced market, with average recreational property prices holding steady year-over-year.
Steady year-over-year price increases have been noted in Northern Nova Scotia (up 57.5 per cent, from $223,433 in Q1 2023 to $351,958 in Q1 2024) and Cape Breton (up 6.3 per cent, from $260,686 in Q1 2023 to $276,982 in Q1 2024). Declines in average price were experienced in Annapolis Valley (down 47.8 per cent, from $229,428 in Q1 2023 to $119,750 in Q1 2024) and St. John’s (down 9.1 per cent, from $354,000 in Q1 2023 to $321,750 in Q1 2024).
Looking toward the summer and winter seasons ahead, demand from families, couples and retirees, alongside limited inventory, are expected to continue impacting home sales and prices. Average recreational property price in Atlantic Canada is expected to increase by year-end in St. John’s (rising 18 per cent), Cape Breton (up eight per cent) Northern Nova Scotia and Annapolis Valley (rising five per cent). Charlottetown will likely see prices holding steady, averaging $275,000.
St. John’s, NL, Annapolis Valley and Northern Nova Scotia have seen more demand from out-of-province buyers this year, primarily from those relocating from Ontario and Western Canada, but Nova Scotia’s deed transfer tax has started to dampen this activity, especially in the northern region of the province.
In Cape Breton, the decision to hold or sell a property is largely driven by lifestyle. For example, seniors are typically offloading their recreational properties to downsize, while high-net worth individuals seeking luxury living are holding onto properties purchased in recreational communities with amenities such as golf courses. Annapolis Valley has also experienced some offloading due to high interest rates or to purchase a smaller property to “age into.” By comparison, recreational property owners in Charlottetown are retaining their recreational properties due to relative affordability in the region, with owners little impacted by recent interest rate increases. Similarly, recreational property owners in St. John’s and Northern Nova Scotia continue to hold onto their properties, with both regions anticipating only a moderate increase in the number of sales over the next year, rising 6.7 per cent and 10 per cent, respectively.
Despite a limited number of recreational properties available for sale in Atlantic Canada, buyers are holding out for waterfront, followed by properties offering access to recreational activities, large indoor living spaces to accommodate home offices and gyms, and good Wi-Fi access.
About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,527 Canadians was completed between March 8-10, 2024, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
About the 2024 Cottage Trends Report
RE/MAX’s 2024 Cottage Trends Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region. Generation X is defined as those ages 43-58, and Boomers ages 59-79. Each RE/MAX office in independently owned and operated.
*According to a Leger survey commissioned by RE/MAX Canada for its annual Housing Market Outlook Report in 2023 and 2024, 73 per cent of Canadians agreed that home ownership is the best long-term investment. In 2021, 52 per cent of Canadians agreed, while in 2022, 49 per cent shared the same sentiment.
**Edmonton Lakes sale price figures and number of sales figures are inclusive of data collected from residential and lakefront property transactions.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in over 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
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