Recreational real estate across Canada could soon see a price dip after rising throughout the COVID-19 pandemic, according to a new report from Royal LePage.
The report, which analyzed data from Canada’s largest real estate company, predicts that on average, prices for a single-family recreational property in the country will drop 4.5 per cent in 2023, to $592,005 from $619,900 in 2022.
The report predicts that the biggest price drops will be seen in Ontario, where prices are expected to fall by five per cent, and in Quebec, where an eight-per cent dip is expected. Meanwhile, in the west, prices are only expected to fall two per cent in B.C. and rise slightly by 0.5 per cent in Alberta.
The forecasted lowering in prices comes after a frenzy of activity in the market during the pandemic.
Prices shot up 11.7 per cent year-over-year in 2022 for a single-family recreational home, according to the report, thanks to increased demand.
Royal LePage CEO Phil Soper told Global News that during the pandemic, people were looking to escape cities that had essentially become ghost towns and instead work out in more remote areas.
That demand led to an “unusual” market that didn’t follow the typical trends from previous years, such as potential buyers typically looking at properties in the spring. Now, though, the recreational market will follow the urban markets and see a correction, according to Soper.
“(Prices) will fall in most parts of the country this year, just as they did in the urban markets in the latter half of 2022,” he said.
The market adjustment is forecasted to happen in the spring and summer, when there is more buying and selling, but the dip won’t go down to pre-pandemic prices, Soper said.
He added that the dip will be about a quarter of the price increases seen during the pandemic — so about five to eight per cent in Quebec from a 20-per cent increase.
And as opposed to there being multiple offers and bidding wars on properties, Soper also expects to see more conditional offers and people looking for bargains.
“It’s a much slower market,” he said. “There’s isn’t the huge backlog of demand that we saw during the pandemic craze.”
© 2023 Global News, a division of Corus Entertainment Inc.
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