Canada’s recreational real estate rush comes to a close: Royal LePage report

The aggregate price of a single-family home in Canada’s recreational regions is forecast to decrease 4.5 per cent in 2023 to $592,005, compared to 2022, as activity in the market wanes, according to a report released Tuesday by Royal LePage.

Royal LePage

This is due to reduced demand as a result of economic uncertainty and a lack of available housing stock, which has helped to keep prices stable. Despite a modest decrease expected this year, the national aggregate price would remain more than 32 per cent above 2020 levels, after two years of double-digit price gains in the country’s recreational real estate market, said the company.

With the exception of Alberta, which is expected to see a 0.5 per cent increase, all of Canada’s provincial recreational markets are forecast to see a decrease in single-family home prices in 2023. The province of Quebec is forecasting the greatest price depreciation, at -8.0 per cent, it added.

The report said that in 2022 the aggregate price of a single-family home in Canada’s recreational property regions increased 11.7 per cent year-over-year to $619,900. This follows year-over-year price gains of 26.6 per cent in 2021. When broken out by housing type, the aggregate price of a single-family waterfront property increased 9.5 per cent year-over-year to $736,900 in 2022, and the aggregate price of a condominium rose 16.6 per cent to $432,000 during the same period.

Phil Soper

“After two years of relentless year-round competition, Canada’s recreational property markets have slowed and returned to traditional seasonal sales patterns,” said Phil Soper, president and CEO, Royal LePage. “While interest rate hikes have less of an impact on the recreational market than homes in urban settings, because families typically put more money down and borrow less, general consumer inflation combined with a severe lack of inventory has dampened sales activity. Buyers who are active in today’s market appear willing to wait for the right property – a sharp contrast to what we experienced during the pandemic.

“Recreational homebuyers tend to purchase for leisure and life-enriching purposes. Call it a want versus a need. Unlike many city buyers who may need to acquire a principal residence quickly, secondary home purchasers often have the benefit of time to find the right property for their specific needs.

“During the pandemic, with offices closed and people working from home, Canadians discovered that a recreational property could double as a principal residence, complete with capital gains exempt status. With high-speed internet now readily available in many rural markets, families flocked to recreational regions to put extra space between themselves and their neighbours and to take advantage of nature; particularly when cultural and sporting venues, shops and restaurants in cities were closed. Many urban businesses now require employees to be in the office at least a few days a week, making long commutes challenging. For many, living in cottage country full-time has lost its romantic shine, meaning we are back to viewing the cottage, cabin and chalet as a weekend and summer escape from urban living.”

The full report can be found here.

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)