Low inventory and demand from retirees contribute to increased prices
ONTARIO, June 20, 2017 – According to the 2017 Royal LePage Canadian Recreational Housing Report released today, recreational market trends across Ontario heated up earlier this year, as characteristics stemming from the Greater Toronto Area (GTA) increasingly influenced pricing and sales activity well beyond its borders.
Provincially, Ontario saw its average recreational property price climb year-over-year to $413,000 in May 2017, with property values and sales activity in the majority of markets rising over the same period of time. Inventory levels across the province have also declined when compared to last year, placing significant upward pressure on pricing and causing market factors to intensify. For the remainder of 2017, it is anticipated that these trends will accelerate, pushing the majority of markets’ sales activity higher.
Demand is far outweighing supply in Collingwood, Meaford and Thornbury and the increase in sales activity is a result of the GTA housing prices. The four-season recreational nature of this areas market is what makes the Georgian Triangle unique.
Prices for lakefront homes in Collingwood, Thornbury & Meaford areas saw a rise of 5%, during the month of May, to an average of $801,500. Climbing by 27%, resort and condominium units are averaging $342,200. This market is especially red-hot as buyers are seeking more affordable, year round units.
Significant interest within the Georgian Triangle has been driven by retirees looking to unlock the value of a home in Toronto and reinvest their money into a property outside the city. Demand for recreational property across Ontario is extremely high. Now, with homeowners across the GTA having accrued significant equity in their homes, many are beginning to look for their weekend retreat. This is affecting the available inventory in the majority of regions and creating a competitive environment where properties may receive multiple offers – something that historically has been very rare when it comes to recreational property transactions. In certain markets, any property with a purchase price of less than $1 million sells very quickly, and while fewer purchasers require mortgages to finance new properties, low interest rates do create an upward pressure to pricing as well.
The recreational property market here in Ontario is pretty unique, with eight million people living in urban and suburban areas just a few hours away from some of the world’s most beautiful landscapes.
Overall, in Ontario, demand remained highest for recreational properties within a two- to three- hour drive of the GTA, where high price appreciation has allowed many prospective purchasers to cash in on their home’s equity, and look towards the recreational property market. Armed with a considerable accumulation of wealth, these purchasers have increasingly begun to view this market segment as a great investment, and one that can bring them significant joy through its associated lifestyle.
Sources:
- The Globe and Mail – “Cottage Country Shows Early Immunity to GTA Real Estate Cooling”
