Is Now a Good Time to Buy a Cottage?
The rush on recreational real estate is over.
After demand for cottages reached a feverish pitch in 2021/2022, due to the pandemic and people’s ability to work from anywhere outside the office, buyers are shying away from properties in recreational regions, resulting in a softening of prices.
The national aggregate price of a single-family home in ‘cottage country’ is expected to decrease 4.5% this year, according to a new report by Royal LePage.
Ontario is one of two provinces expected to see prices dip below the national average, with a forecasted decline of 5%.
This is because of reduced demand as a result of economic uncertainty and the general requirement that employees be in the office at least a few days a week, making long commutes challenging and full-time cottage living less desirable. Interest rate hikes have had less of an impact on the recreational market than homes in urban settings because people typically put more money down and borrow less for a cottage purchase.
Despite a modest decrease in price expected this year, the national aggregate will remain more than 32% above 2020 levels, after two years of double-digit price gains.
In 2021, property prices increased 26.6% from 2020. Last year, prices increased 11.7% year-over-year.