Real-estate company Royal LePage says the average price of a house in Canada's "recreational property regions" will rise 15 per cent in 2021 to $502,730, as the pandemic prompts buyers to explore country living.
The company is raising its previous estimate from November in light of a shortage in inventory and a surge of people interested in using the homes for both weekend getaways and remote work.
"From coast to coast, the line between primary residence and recreational property is blurring," said Phil Soper, president and chief executive of Royal LePage. "The trend began last summer when the option of traveling 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."
Excess savings from people staying home throughout the pandemic and low interests rates are also contributing to the rise in buyers in those areas, Soper said.
Royal LePage expects that houses in the recreational regions of Ontario and Atlantic Canada will see the greatest increases, at 17 per cent. Prices in Quebec and British Columbia are forecast to rise 15 per cent and 13 per cent, respectively.
Supply shortages are leading to situations in which buyers are forced to compete with other offers, which often results in houses selling for above their asking prices, Royal LePage said.
The expected increase follows a year of strong appreciation in cottage prices throughout 2020, with the average recreational property price in Canada increasing by 16 per cent to $437,156 compared with 2019.
The shift to remote work has already prompted infrastructure investments in popular cottage destinations. Purolator said earlier this year that it was expanding capacity at its more remote terminals to handle increased package shipments to those regions.
This report by The Canadian Press was first published March 23, 2021.
Jon Victor, The Canadian Press