Is it Worth the Wait? Experts Predict a Decline in Canada's Recreational Property Prices in 2023
Royal LePage's recent report suggests that recreational property prices in Canada will decline over the next year due to a lack of supply and economic uncertainty. The aggregate price of a single-family home in recreational regions is expected to drop to $592,005 in 2023, a 4.5% year-over-year decrease.
The decline will be seen in various regions across the country, with Quebec expected to see the largest price drop at 8.0%, followed by Ontario (5.0%), Atlantic Canada (3.0%), the Prairies (3.0%), and British Columbia (2.0%). However, Alberta will reverse the trend with a 0.5% increase in prices.
Although prices had surged in the past two years, with a 26.6% year-over-year increase in 2021 and an 11.7% rise in 2022, the expected decline comes as a relief to buyers who were priced out of the market during the pandemic.
The national aggregate price of a single-family recreational property is predicted to remain 32% higher than 2020 levels, despite the fall. The aggregate price of a single-family waterfront property rose 9.5% year-over-year in 2022 to $736,900, while the aggregate price of a condo in recreational markets increased 16.6% annually to $432,000.
Royal LePage's report is based on forecasts and figures from 50 markets and a survey of over 200 brokers and sales representatives. A significant 57% of respondents reported less inventory in 2023 compared to the previous year, while 51% saw a decline in demand. Compared to the pre-pandemic market, 65% thought supply had dropped, while 38% believed demand had increased.
According to Phil Soper, president and CEO of Royal LePage, the decline is due to a severe lack of inventory and general consumer inflation. While interest rate hikes have less impact on recreational property markets than homes in urban areas, Soper suggests that buyers are willing to wait for the right property, which is a stark contrast to the pandemic's frenzy.
Despite Quebec's predicted fall in prices, the province experienced one of the largest jumps in prices from 2021 to 2022, at 16.1%, with only Atlantic Canada seeing a more significant increase at 17.2%. The Prairies posted a 6.0% year-over-year increase in 2022, the smallest of any province, with an aggregate price of a single-family home at $271,300. The highest aggregate price is found in Alberta, at $1,165,500, largely due to the luxury properties in the Canmore market near Banff National Park.
As the world returns to normal, families are moving back to urban and suburban areas. While 56% of those surveyed reported that homeowners are not moving back, Soper points out that the long commute poses a challenge for those who do. The report suggests that living in recreational regions will return to being viewed as a weekend and summer escape from urban living.
What do you think of the expected decline in recreational property prices in Canada? Do you believe it's a good time to buy a recreational property? Share your thoughts in the comments below.