The Price of Canada's Vacation Homes is Expected to Rise
by Yvonne von Jena | June 7, 2018
If you're on the hunt for a summer recreational home, be prepared to spend more. According to a new survey by Royal LePage, the average price is expected to rise 5.8% to $467,764 by the end of September, which is an increase from $442,239 in the same period last year.
The Royal LePage survey polled 200 of the real estate firm's property advisers across Canada between mid-May and the start of June. Results indicate that retiring baby boomers and gen-Xers are driving recreational home sales as they look toward retirement or for a secondary home to raise children.
The survey comes just days after data from real estate boards in Toronto and Vancouver showed that home sales in those cities fell last month. The Greater Toronto Area saw a drop of more than 22% compared to a year ago, while Metro Vancouver experienced saw a decline of more than 35% in the same time period.
But, about 42% of the advisers surveyed by Royal LePage said they thought recreational housing sales would increase in their region by the end of cottage season this year, compared to the same period last year.
Not all of Canada's biggest property markets, however, are expected to see prices climb in the recreational segment this year.
"With Canada's fastest growing economy, British Columbia's vast and varied recreational regions might be expected to lead the country," said Phil Soper, CEO of Royal LePage. "That will not be the case in the near-term as new taxes aimed specifically at recreational property owners are expected to weaken markets across the province, driving would-be purchasers to invest elsewhere."
"A growing trend is emerging whereby many potential buyers venturing into the market seek out older properties in order to tear them down and build their dream properties, keeping the total price low," the survey said.
"This is largely due to the region's excellent affordability, which continues to entice a growing number of prospective retirees into the market."
The lower prices are also enticing foreign buyers. Approximately 40% of the advisers surveyed said they expect purchases from foreign buyers to increase in the region, where they currently account for 5-10% of the market.
To compare that to the national picture, more than 73% of all advisers surveyed said that foreign ownership accounted for less than 5% of the recreational market in their regions.
Click here for RLP’s price summary.