The red-hot demand seen in Canada’s urban centres has migrated into recreational markets, as interest and activity in suburban and rural properties continues to grow. Despite rising demand, 57 per cent of Canadian recreational markets still have at least one property type with an average price below $500,000, according to the 2021 RE/MAX Recreational Property Report. Furthermore, 57 per cent of RE/MAX brokers and agents in recreational markets anticipate single-digit price growth over the remainder of 2021.
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 (59 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 survey also found that 11 per cent of Canadians were searching for a recreational property prior to the start of the pandemic and are still searching, and 15 per cent of Canadians who were not searching for a recreational property prior to the pandemic are now looking.
Shifting home-buying trends, as prompted by the pandemic, are exacerbating inventory challenges in a majority of recreational markets across Canada. 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. Tofino, Ucluelet and Niagara regions, to name but a few, are experiencing low inventory levels, bidding wars and sky-high prices.
“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. “But Canadians recognize that recreational properties remain an affordable option in such a turbulent market. There are still many recreational markets across Canada that are deemed affordable, despite the growing demand and rising prices.”
According to RE/MAX brokers and agents, sellers’ market-like conditions are anticipated to persist for the remainder of the year in 97 per cent of regions examined in the report. These conditions are typically accompanied by rising prices, which has been a trend in 2020 that is expected to continue through 2021. RE/MAX brokers report that 57 per cent of Canada’s recreational markets include at least one property type priced in the $200,000 – <$500,000 range. This is down from 87 per cent in 2019.
The most affordable recreational regions for waterfront properties across Canada include Thunder Bay ($425,805), Charlottetown ($334,447) and the 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.
All of Ontario’s recreational markets are sellers’ markets, with low inventory and high demand. These regions include Bancroft, Barrie–Innisfil, Haliburton, Kenora, Muskoka, Niagara region, Parry Sound, Peterborough and The Kawarthas, Prince Edward County, Sudbury and Thunder Bay to name a few.
Young families, many from the GTA and Hamilton, are now looking to Muskoka after feeling priced out of urban centres. This is impacting supply and affordability in the region, with average sale price of waterfront properties in Muskoka anticipated to increase by 20 per cent this year. Prince Edward County is seeing an uptick in buyers with work-from-home allowances, as well as retirees, who are considered to be driving the most market activity in the region.
In Niagara region, the average sale price of waterfront properties reached $1,546,561 in the first four months of 2021, a 77-per-cent increase from an average sale price of $875,036 in 2019. Strong price growth since 2019 was also evident in Niagara’s water-access properties, which increased 160 per cent, from $506,700 in 2019 to $1,317,500 in 2021. Continued price growth for these property types is anticipated through the remainder of the year, by nine per cent and eight per cent, respectively. Families looking for a secondary residence are the key drivers of market activity in the region. Strong interest from this cohort is anticipated to continue, with Niagara’s close proximity to Crystal Beach, Port Colborne, Niagara Falls and Grimsby.
SOURCE RE/MAX Canada