If you’ve ever thought about buying a recreation property in Canada, now might be the time, as prices are expected to soften amid waning activity, according to Royal LePage.

The aggregate price of a single-family home in Canada’s recreational regions is forecast to decrease 4.5 per cent in 2023 to $592,005, compared to 2022, as activity in the market wanes, Royal LePage says. This is due to reduced demand as a result of economic uncertainty and a lack of available housing stock, which has helped to keep prices stable. Despite a modest decrease expected this year, the national aggregate price would remain more than 32 per cent above 2020 levels, after two years of double-digit price gains in the country’s recreational real estate market.

With the exception of Alberta, which is expected to see a 0.5-per-cent increase, all of Canada’s provincial recreational markets are forecast to see a decrease in single-family home prices in 2023.

Traditional seasonal sales patterns

“After two years of relentless year-round competition, Canada’s recreational property markets have slowed and returned to traditional seasonal sales patterns,” says Phil Soper, president and CEO, Royal LePage. “While interest rate hikes have less of an impact on the recreational market than homes in urban settings, because families typically put more money down and borrow less, general consumer inflation combined with a severe lack of inventory has dampened sales activity. Buyers who are active in today’s market appear willing to wait for the right property – a sharp contrast to what we experienced during the pandemic.”

In Ontario in 2022, the aggregate price of a single-family home in the recreational property market increased 7.3 per cent year-over-year to $634,800, compared to 2021. The price of a single-family waterfront property increased 8.9 per cent to $1 million, while condos increased 15.1 per cent to $510,900.

More balanced market

“Early signs this spring point to a more balanced market where inventory levels and sales are trending in line with historical norms,” says John O’Rourke, broker, Royal LePage Lakes of Muskoka. “Traditional cottage buyers – end users that plan on enjoying their property – are still engaged and seem eager to jump back into a market in which they are not competing with the investment-focused buyer; a prominent player during the pandemic boom.”

While home prices in a select few recreational markets in Ontario, including the ever-popular Southern Georgian Bay area, may increase marginally over the next year, a decline in activity overall is expected to dampen price growth.

The aggregate price of a single-family home in Ontario’s recreational regions is forecast to decrease 5.0 per cent in 2023 to $603,060.