News: Vancouver Real Estate Market

DOUBLE DIGIT GAINS FORCAST IN NATIONAL RECREATION HOUSE PRICE IN 2022

Despite a return to pre-pandemis travel and interest rate increases, demand still outnumber supply in amy recreational regions 

Highlights:

  • Aggregate price of a single-family waterfront property surged 21.5% year-over-year in 2021 nationally
  • Single-family homes in Ontario’s recreational property market recorded the highest year-over-year aggregate price appreciation in 2021, rising 34.6%
  • Quebec and Atlantic Canada expected to see highest recreational property price gains in 2022, rising 15%
  • Single-family recreational homes in Ontario forecast to increase 13%
  • Single-family recreational homes in British Columbia forecast to increase 12%
  • 84% of recreational property experts report lower inventory than last year in their respective regions

TORONTO, ON, March 31, 2022 – According to Royal LePage, the aggregate price of a single-family home in Canada’s recreational regions is forecast to increase 13% in 2022 to $640,710, as demand continues to outpace supply.

“The factors challenging Canada’s residential real estate market – chronic low supply and growing demand – are amplified in the recreational property segment,” said president and CEO of Royal LePage, Phil Soper. “Demand for recreational properties continues to vastly outstrip inventory in many cottage regions across the country. Waterfront and mountain-top locations near cities are limited by nature, even in a vast land like Canada, forcing buyers into multiple-offer scenarios. Even more than in urban regions, it is vital that buyers and sellers employ the services of a local agent who has recreational market expertise.”

Single-family recreational homes in Atlantic Canada and the province of Quebec are forecast to see the highest price appreciation in the country this year, set to increase 15%, while prices in Ontario are forecast to increase 13%  and 12% in  British Columbia. According to a survey of 151 Royal LePage recreational real estate professionals across the country, 84% said that their market has less inventory this year than last year for their respective regions, including 50% that reported significantly less available inventory.

“While the harshest of the pandemic-related restrictions may be behind us, and Canadians are starting to resume normal activities once again, some things will remain forever changed. The way we view our homes, and our connection to community and nature have shifted,” Soper said. “The desire for homes with more space, both indoors and out, is a trend that I believe will long outlive the pandemic. Many Canadians, especially those with the option to continue working remotely, are prioritizing their desired lifestyle when considering where they want to live. Recreational regions offer greater access to nature and, as a secondary property, can be a good investment if used as a rental home, even in part.”

The aggregate price of a single-family home in Canada’s recreational property regions increased 26.6% year-over-year to $567,000 in 2021, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 21.5% to $976,000, and the aggregate price of a condominium rose 15.4% to $374,000.

Across the country, a chronic shortage of supply of recreational properties continues to pose a challenge for buyers, often forcing them into multiple-offer situations. In Ontario, 91% of Royal LePage recreational real estate professionals surveyed said that more than half of properties listed are selling above the asking price. In Atlantic Canada, 69% of recreational property experts reported the same, followed by 68% in Quebec and 56% British Columbia.

“In addition to increased interest from young families, there remains a strong demand for recreational properties from buyers nearing retirement,” said Soper. “With remote work options, Canadians are transitioning into their final working years while getting to know their new community.”

The 2021 Royal LePage Boomer Survey found that 35% of boomers in Canada said they were considering purchasing a primary residence within the next five years. Of them, more than half (56%) said they were considering buying in a rural or recreational region, which could result in up to approximately 1.8 million Canadians having entered the recreational real estate market within the five year period.


Atlantic Canada

The aggregate price of a single-family home in Atlantic Canada’s recreational regions is forecast to increase 15% in 2022 to $272,550.

In 2021, the aggregate price of a single-family home in the East Coast’s recreational market increased 24.1% year-over-year to $237,000, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 39.3% to $333,000.

According to a Royal LePage survey of recreational property experts, 54% of respondents in Atlantic Canada reported significantly less inventory this year, compared to last year. 69% of respondents said at least half of the properties sold in their region are selling over the asking price.

“People’s inability to travel abroad for the last two years has significantly impacted recreational markets in Atlantic Canada. Strong demand for real estate from out-of-province buyers continues to create tight competition,” says Corey Huskilson, real estate professional, Royal LePage Atlantic in South Shore, Nova Scotia. “There is a lot of frustration among buyers. With very little inventory to choose from, it can be difficult to find a property that checks all the boxes on their wish list and still falls within budget.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 29% of boomers in Atlantic Canada said they were considering purchasing a primary residence within the next five years. Of them, 64% said they were considering buying in a rural or recreational region, which could result in up to approximately 131 thousand people having entered the recreational real estate market within the five year period.


Quebec 

The aggregate price of a single-family home in Quebec’s recreational regions is forecast to increase 15% in 2022 to $356,500.

In 2021, the aggregate price of a single-family home in the province’s recreational market increased 24.5 % year-over-year to $310,000, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 26.4% to $421,000, and the aggregate price of a condominium increased 5.5% to $270,000.

According to a Royal LePage survey of recreational property experts, 86% of respondents in Quebec reported less inventory this year, compared to last year, including 54% who reported significantly less. 68% of respondents said at least half of the properties sold in their region are selling over the asking price.

Éric Léger, real estate broker with Royal LePage Humania in the Laurentians, says the significant growth of recreational property prices in the province in 2021 continued to be driven by strong demand outpacing limited supply.

“Two years after the start of the pandemic, multiple-offer scenarios continue to be common. In some cases, properties can sell between $100,000 and $125,000 over the asking price, depending on the area and the condition of the home. It’s worth noting that prior to the pandemic, homes in the region rarely sold for the list price or above. On the cusp of the spring market, demand for recreational properties remains strong in the Laurentians, and across all resort areas in the province of Quebec. As was the case last year, demand for waterfront properties is expected to continue to drive activity in the region,” said Léger.

“Buyers have adapted their lifestyles to accommodate pandemic-related restrictions, and many of these new habits will remain,” added Léger. “The need for a home office will continue to influence buyers’ choices, and as labour shortage persists, employers will need to be flexible in order to retain workers and recruit new talent. All these factors are likely to contribute to continued strong demand in the province’s recreational property markets.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 29% of boomers in Quebec said they were considering purchasing a primary residence within the next five years. Of them, 62% said they were considering buying in a rural or recreational region, which could result in up to approximately 400 thousand people having entered the recreational real estate market within the five year period.


Ontario

The aggregate price of a single-family home in Ontario’s recreational regions is forecast to increase 13% in 2022 to $737,890.

In 2021, the aggregate price of a single-family home in the province’s recreational market increased 34.6% year-over-year to $653,000, compared to 2020; the strongest price appreciation in the country. During the same period, the aggregate price of a single-family waterfront property increased 31.8% to $888,000, while the aggregate price of a condominium increased 20.7% to $496,000.

“Prior to the pandemic, an entry-level property in Muskoka would have cost about $400,000. Today, the same property would not go for less than six- to seven-hundred thousand, and you won’t find many listings like this today. Inventory is at an all-time low,” said John O’Rourke, broker, Royal LePage Lakes of Muskoka. “Today, more than ever before, cottage buyers are using their properties year-round, making them even more valuable. The vast majority of buyers are coming from the GTA and the Golden Horseshoe region, as they can access the area in just a few hours. Over the past two years we have seen a marked increase in full-time residents which helps our local, service-oriented, economy.”

According to a Royal LePage survey of recreational property experts, 84 per cent of respondents in Ontario reported less inventory this year, compared to last year (44% reported slightly less, 40% reported significantly less). 87% of respondents said at least 75% of the properties sold in their region are selling over the asking price.

“Demand from remote workers has dipped compared to peak demand last year as workers are increasingly heading into the office. However, many buyer hopefuls are still being priced out of the recreational property market in Rideau Lakes,” said Pauline Aunger, broker of record, Royal LePage Advantage Real Estate. “Inventory is extremely thin, and I expect that will continue to be the case through the spring, resulting in further price increases this year. With tight competition and multiple offers on just about every listing, the successful buyers are the ones who are coming prepared.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 37% of boomers in Ontario said they were considering purchasing a primary residence within the next five years. Of them, 56% said they were considering buying in a rural or recreational region, which could result in up to approximately 729 thousand people having entered the recreational real estate market within the five year period.


Prairies

The aggregate price of a single-family home in the Prairies’ recreational regions is forecast to increase 3% in 2022 to $253,380.

In 2021, the aggregate price of a single-family home in the Prairie provinces’ recreational market increased 11.3% year-over-year to $246,000, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 6.2% to $377,000.

According to a Royal LePage survey of recreational property experts, 84% of respondents in the Prairies reported less inventory this year, compared to last year, including 46% who reported significantly less. 54% of respondents said at least half of the properties sold in their region are selling over the asking price.

“Buyers are frustrated by the lack of available inventory in Saskatchewan’s most popular recreational regions,” said Lou Doderai, broker and owner, Royal LePage Icon Realty. “While there are thousands of lakes in the northern and eastern parts of the province, the region known as the ‘gateway to the North’ remains popular among residents looking for a weekend getaway. It can be accessed by car within an hour of Prince Albert and less than two hours from Saskatoon.”

Doderai noted a slight slowdown in demand recently, compared to earlier in the pandemic. He expects prices will stabilize this year, as activity in the region decreases with the re-opening of international travel and the rise in interest rates.


Alberta

The aggregate price of a single-family home in Alberta’s recreational regions is forecast to increase 9% in 2022 to $1,170,660.

In 2021, the aggregate price of a single-family home in the province’s recreational market increased 31.5% year-over-year to $1,074,000, compared to 2020. As a large and highly-sought-after recreational destination, Canmore’s real estate market has a significant impact on the median price of a single-family home in Alberta, with its proximity to Banff National Park and luxury mountain properties.

“Strong demand continues to be driven by buyers from Western Canada, although we’ve seen an uptick in interest from Ontario and Quebec residents over the last two years. The region attracts mainly buyers planning for retirement,” said Brad Hawker, associate broker, Royal LePage Solutions. “With less than one month of inventory currently available and very little in the way of new development on the horizon, I expect the spring market will once again be very competitive for buyer hopefuls, which will put more upward pressure on prices.”

According to a Royal LePage survey of recreational property experts, 57% of respondents in Alberta reported significantly less inventory this year, compared to last year.

“Cottages on Wabamun Lake and Lac Ste. Anne have always been popular among Edmonton residents looking for a summer weekend getaway within a short commute of the city,” said Tom Shearer, broker, Royal LePage Noralta Real Estate. “Since pandemic restrictions have limited Canadians’ ability to travel abroad, that demand has skyrocketed. Line-ups at boat launches and campgrounds are longer than ever, as Canadians are enjoying the outdoors. Strong demand for waterfront properties continues to put upward pressure on prices in the region, and I don’t expect there will be any relief this spring.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 41% of boomers in Alberta said they were considering purchasing a primary residence within the next five years. Of them, 55% said they were considering buying in a rural or recreational region, which could result in up to approximately 207 thousand people having entered the recreational real estate market within the five year period.


British Columbia

The aggregate price of a single-family home in British Columbia’s recreational regions is forecast to increase 12% in 2022 to $1,029,280.

In 2021, the aggregate price of a single-family home in the province’s recreational market increased 22.4% year-over-year to $919,000, compared to 2020. During the same period, the aggregate price of a single-family waterfront property increased 15.2% to $2,068,000, while the aggregate price of a condominium increased 16.8% to $375,000.

“Demand continues to outstrip supply in the Okanagans, as the desire for more space and access to outdoors remains a top priority for many Canadians, especially those who choose to vacation within the country,” said Francis Braam, broker, Royal LePage Kelowna. “Low supply of housing in the region will continue to challenge buyers this spring, and I anticipate prices will continue their upward climb through 2022.”

According to a Royal LePage survey of recreational property experts, 63% of respondents in British Columbia reported significantly less inventory this year, compared to last year. 56% of respondents said at least half of the properties sold in their region are selling over the asking price.

“Over the last two years, we’ve seen a significant increase in demand from Canadian buyers, both from within the province and across the country, as international travel restrictions limited our ability to vacation abroad,” said Frank Ingham, associate broker, Royal LePage Sussex. “Now that border restrictions are being lifted, I expect a lot of demand from south of the border will return to Whistler and Pemberton. This will put increasing upward pressure on recreational property prices this spring, as available inventory is already at historic lows. However, prices will likely stabilize in the fall, if interest rates continue to rise.”

According to the 2021 Royal LePage Boomer Survey conducted last year, 39% of boomers in British Columbia said they were considering purchasing a primary residence within the next five years. Of them, 50% said they were considering buying in a rural or recreational region, which could result in up to approximately 256 thousand people having entered the recreational real estate market within the five year period.


Royal LePage 2022 Spring Recreational Property Price Forecast and 2021 Price Data Chart (national and regional): rlp.ca/table_2022springrecreationalpropertyreport

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