Ontario cottage prices expected to increase by almost 20% this year
The COVID-19 pandemic has had a major impact on housing markets throughout Ontario and across the country since it first arrived last March, leading many to reconsider life in the big city, and home prices in the province's recreational regions, including Muskoka, to explode.
According to the new Royal LePage Spring Recreational Property Report, the aggregate price of a house in Ontario's recreational markets, also known as cottage country, increased by 19.4 per cent from 2019 to 2020.
And that growth is expected to continue this year, with the aggregate price of a house in these regions forecast to increase by another 17 per cent in 2021 — up to $547,207.
Just Released... Royal LePage's Spring 2021 Recreational Property Report, highlighting current market trends in more than 50 of Canada's most popular recreational regions. 🚣📊— Royal LePage Canada (@Royal_LePage) March 23, 2021
Read the full press release here: https://t.co/fDAcBtssf6 pic.twitter.com/iNakUV14oD
"Muskoka, like many smaller communities within a reasonable drive from the GTA, was particularly impacted by the migration out of the GTA, and by buyers who accelerated their long-term plans to purchase a second property," said John O'Rourke, broker for Royal LePage Lakes of Muskoka, in a statement.
"A scarcity of inventory added more fuel to the fire, creating competition in the market unlike anything we've seen before."
According to the report, 87 per cent of recreational real estate professionals said that more than half of the properties available on the market right now are selling above asking price.
Another 87 per cent of respondents said recreational regions in Ontario have seen inventory decrease compared to what is typical for their respective regions, including and especially the highly-sought after cottage destination of Muskoka.
More than half of of Royal LePage recreational property experts in Ontario representing buyers meanwhile said their clients are making an average of four to 10 offers before transacting, and 69 per cent of those who work primarily with sellers say their clients' properties are receiving a minimum of four offers on average.
Another 27 per cent of agents indicated that they're seeing more than 10 offers per listing.
"Land O'Lakes is not a region that typically experiences this kind of activity, but since the onset of the pandemic, supply cannot keep up with the increasing demand," said Royal LePage ProAlliance Realty broker Chris Winney in a statement.
"As no one has been able to travel for the last year, buyers of all ages and stages of life are looking for recreational properties that offer the flexibility, and internet quality, that will allow them to work remotely if they choose, but also have rental potential."
The report explains that properties with four-season usability are particularly attractive to buyers in Ontario at the moment, and experts expect another brisk spring market.
The recreational housing market trend will likely come as no surprise to anyone who has been following the pandemic's effects on real estate over the past year as remote work and pandemic-related restrictions caused many former city-dwellers to leave Toronto in search of homes in smaller, more affordable locations with more space.
According to the Royal LePage 2021 Demographic Survey released last month, 43 per cent of Ontario respondents aged 25 to 35 said the pandemic has increased their desire to move to a less dense area, and 68 per cent said they feel it's important to work for an employer that allows them to work remotely.
And while houses in Ontario's recreational property markets are expected to see the highest price gains in the country in 2021, those in Atlantic Canada are also likely to rise by an equivalent 17 per cent this year.
Price tags are similarly rising in other provinces. Canada's overall recreational house prices are forecast to increase by 15 per cent in 2021.
"Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada," said Phil Soper, president and CEO of Royal LePage.
"The flexibility provided by working remotely, excess savings from months sitting at home, and low interest rates have left Canadians young and old alike to seek properties with more space, easy access to nature, and the ability to achieve that ever-elusive work-life balance. And an increasing number of new owners intend to use these escapes for both weekend play and Monday to Friday work."
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