Source – financialpost.com
- ‘…Canada’s urban real estate boom has cascaded all the way into cottage country, lifting prices even in the remote parts of the country….Despite the surge in prices of rural homes, more first-time buyers are looking at recreational properties for their starter homes”
Bidding wars and sky-high prices — cottage property values set to rise by another 30% amid rural rally
Plus, these recreational markets will continue to see a surge for the rest of the year
By Yadullah Hussain, May 18, 2021
Canada’s urban real estate boom has cascaded all the way into cottage country, lifting prices even in the remote parts of the country.
A new report by RE/MAX brokers and agents published this morning notes that the recreational property market surge will not subside anytime soon, with prices set to rise by 30 per cent more before the year is over.
While the run-up in prices started as many were hoping to flee unaffordable urban home prices, the trend of escaping crowded cities during the pandemic is also contributing to a price surge in rural havens.
“The growing demand in these regions is also putting upward pressure on prices which is impacting affordability in many recreational markets, which RE/MAX brokers anticipate will be a long-term trend,” RE/Max noted in a report. “Tofino, Ucluelet and Niagara regions, to name but a few, are experiencing low inventory levels, bidding war and sky-high prices.”
Still, recreational properties remain a cheaper option for many, with 57 per cent of rural Canadian markets featuring properties that are within the $200,000 to $500,000 price range. But in a sign of how far prices have surged, two years ago 87 per cent of the markets were within the $200,000 to $500,000 price range.
“There’s intense competition among buyers in Canada’s recreational property markets and inventory is stretched thin,” says Christopher Alexander, chief strategy officer and executive vice president, RE/MAX of Ontario-Atlantic Canada.
Rideau Lakes properties with water access has seen the biggest surge in prices over a two-year period, rising 221 per cent, while French River, Sudbury, waterfront properties are up 180 per cent. Meanwhile, Niagara-On-The-Lake properties near the water have climbed 160 per cent since 2019, RE-/MAX data shows.
The most affordable recreational regions for waterfront properties across the country are Thunder Bay ($425,805), Charlottetown ($334,447) and Interlake Region of Manitoba ($363,833), while Okanagan ($2,430,434), Barrie-Innisfil ($1,841,217) and Niagara region ($1,546,561) are the most expensive recreational property markets for waterfront properties
Looking ahead to the rest of the year, the brokerage expects waterfront Tofino properties on Vancouver Island to see the biggest increase in prices, at 43 per cent, by the end of 2021, followed by condos in Kenora, Ontario, (32 per cent), condos in Parry Sound, Ontario, (30.5 per cent) and waterfront properties in Kenora (30 per cent). RE/MAX does not anticipate a decline in any of 33 regions it tracks this year, although a handful may see no growth.
Despite the surge in prices of rural homes, more first-time buyers are looking at recreational properties for their starter homes — a clear sign that they believe the dream of buying urban homes are out of reach.
According to a Leger survey conducted on behalf of RE/MAX, more than half of those who plan to purchase a recreational property in the next year (54 per cent) are first-time recreational property buyers.
“Twenty-one per cent of Canadians are looking to recreational markets after being priced out of an urban centre. Low borrowing rates are working in their favour, with 22 per cent saying the lower rates have increased their ability to buy,” the report noted.
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