Scant inventory is propelling demand for recreational properties in Quebec and Ontario—and in the latter’s case, not even flooding proved a deterrent.
“During the spring market, the demand has been so strong that even with the flooding we’ve seen, some people are viewing and purchasing properties that are underwater,” Phil Soper Royal LePage’s CEO, told CREW. “It’s an anecdotal tale, but demand has been so high that people are still paying market value, even though they can’t access part of the property. They’re looking at the land for its potential and moving ahead anyway.”
Royal LePage’s Canadian Recreational Property Prices Forecast details a market with inventory so constricted that prices in Ontario rose 7.2%—despite sales being down 7.9%—and 5.6% in Quebec—two provinces that saw considerable flooding this year. According to the report, stiff competition between retirees and millennials with young families explains the appreciation, especially in Ontario.
Soper says the national price surged because of the two most populous provinces in Canada.
“The national price is being driven by Quebec and Ontario, where the urban markets are either very strong, as in the case of Quebec, or rapidly recovering, as is the case in Ontario, and you have two groups of buyer segments that are both eager to get into the recreation market,” he said.
“What’s different at this period of time is the increasing the number of baby boomers who are leaving their principal residences and vying for recreational properties, so you have kids and parents both looking in the same marketplaces, although they may look into different properties—entry level versus luxury—but in a supply constrained market, it’s putting upward pressure on prices.”
The Muskoka region is home to the highest price demand for recreational properties—although interest is high across the province.
“Geographically, we’re constrained by the amount of waterfront property that’s available within a two-and-a-half- to three-hour drive from our major urban centres, particularly the GTA,” said Soper. “As we have increasing population, we have an increased proportion of people looking for these recreational properties.”
The strongest urban market in Canada is Montreal and that’s having a spillover effect in the Laurentians, just north of the city. Moreover, the affordability of a two-storey Montreal home has made the province’s real estate attractive to people outside of Quebec.
“The Royal LePage benchmark price of a two-storey Montreal home can be had for had for half of the price of what it would cost in Toronto and that translates into the recreational market too,” said Soper. “Interest is coming from Ontarians and Americans in Quebec recreational real estate in addition to demand from the Quebecois themselves.”
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