With summer around the corner, Canadians are naturally dreaming of weekends by a lakeside cottage, causing a seasonal spike in the recreational property market.

But this year, things are different.

Indeed, according to a new report from Royal LePage, the aggregate price of a house in Canada’s recreational regions is forecast to increase 15 per cent this year to $502,730, as demand continues to rapidly outpace inventory. And like with the residential property market, Ontario leads the way in price growth due to this increasing interest – thanks in large part to COVID-19.

“From coast to coast, the line between primary residence and recreational property is blurring,” says Phil Soper, president and CEO, Royal LePage. “The trend began last summer when the option of travelling abroad was taken away, and continued to gain popularity as it became clear that with access to high-speed Internet, many people can do their jobs from just about anywhere.”

Eastern Canada on the rise

The aggregate price of a house in Canada’s recreational property regions increased 16 per cent year-over-year to $437,156 in 2020 compared to 2019. During the same period, the aggregate price of a waterfront property increased 9.8 per cent to $813,385 and the aggregate price of a condominium rose 10.5 per cent to $310,257.

Houses in the recreational regions of Ontario and Atlantic Canada are forecast to see the highest price appreciation in the country this year, set to increase 17 per cent, while prices in Quebec and BC are expected to increase 15 per cent and 13 per cent, respectively.

“The low inventory, high demand scenario that is defining Canada’s current real estate landscape can be frustrating for buyers and their agents,” adds Soper. “Without enough supply to meet demand, prices continue to increase at above normal rates. And with so few listings to choose from, owners are concerned they will have nowhere to go if they sell before buying, so they hesitate to list. This cycle makes it difficult for anyone to move ahead.

“Life during the pandemic has made cottage country and country living more desirable than ever, in every part of Canada. 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.”

Royal LePage real estate professionals in western and Atlantic Canada have reported an increase in out-of-province buyers over the past year.

Ontario leads the way

The aggregate price of a property in Ontario’s recreational regions is forecast to increase 17 per cent in 2021 to $547,207, after rising 19.4 per cent last year to $467,698. In 2020, the aggregate price of a waterfront property increased 21.5 per cent to $673,400, while condominiums in these areas increased 8.5 per cent to $406,188.

“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,” says John O’Rourke, broker, Royal LePage Lakes of Muskoka. “A scarcity of inventory added more fuel to the fire, creating competition in the market unlike anything we’ve seen before.”

Due to the high prices in many Ontario rec property regions, prospective buyers might think about looking outside the province to more affordable areas – notably Atlantic Canada.