Those who bought in the last year will soon find out if their investment has paid off
The spring homebuying season can provide a fantastic return on investment or an unwanted shock for owners of homes in Canada’s recreational markets. But with so much economic uncertainty this year, what’s the outlook?
Royal LePage has just released its latest analysis of the recreational housing market with good news for most. Nationally across the provincial recreational markets, a 4% year-over-year increase is expected to a median $652,808, although Atlantic Canada could see 8%.
While geopolitics and economic concerns are clear, demand continues to outstrip supply in many markets, as Canadian families hold on to their dream of owning a recreational home.
“The pandemic-era scramble for recreational properties, once reminiscent of a modern-day gold rush, has thankfully eased – along with the chaos of bidding wars and thin inventories,” said Phil Soper, president and CEO, Royal LePage. “While the mainstream market is more sensitive to economic shifts, demand in the recreational segment remains steadfast, even during periods of market hesitation.”
Looking at the data for 2024, the weighted median price of a single-family home in Canada’s recreational property regions increased 2.3% year-over-year to $627,700, but decreased 3.6% for a waterfront property to $1,063,400, while a standard condominium gained just 0.2% to $431,700.
Rental market
For investors or other homeowners who seek income returns through renting out their recreational home, this has become tougher as consumers face hard decisions on how to use their disposable income.
“The option to rent out your cottage or cabin in the off-season to generate income is becoming increasingly challenging, due to tighter short-term rental regulations in many regions – particularly in Ontario, Quebec, and BC. Investors considering recreational properties as an alternative to traditional real estate face the same limitations,” said Soper. “If policies aimed at severely restricting the recreational rental market persist, they risk discouraging buyers and dampening local economies. Seasonal tourism is a vital contributor to employment, small business success, and regional development in cottage country. We encourage policymakers to strike a thoughtful balance, one that protects access to housing for local communities while supporting the vibrancy of local tourism.”
