It is mainly Canadians living in urban areas that are driving up prices in the cottage industry, including knowledge workers, seniors, and young families with children. Amidst the pandemic, cottage prices increased by 11.5 percent in 2020, and this trend is expected to continue in 2021. More and more people are choosing to relocate to small towns and rural areas and are buying all sorts of properties, including cabins, chalets, and farmhouses. For many of them, the most important thing is to have a stable internet connection as many are working remotely.
What Figures Tell
While home sales skyrocketed by over 31 percent in November 2020, cottage properties gained in value because of increased demand. Ontario is leading when it comes to price gains, with an increase of close to 30 percent in some places and hikes of 15 percent in Moncton, Montreal, and Ottawa. The recreational property industry is booming in Ontario, with home prices skyrocketing in North Muskoka (17 percent), Haliburton Highlands (28 percent), Gravenhurst (44 percent), and Rideau Lake (25 percent). The prices of recreational homes in Quebec also saw significant gains, with increases by 36 percent in Sutton and 27 percent in the Laurentides. According to senior economist Robert Kavcic working for BMO Capital Markets, the trend is expected to continue in 2021.
Inventory levels have hit record low levels due to increased demand, with buyers from Quebec and Ontario relocating to the countryside. A recent report by Royal LePage confirms this, pointing to the fact that real estate agents in more than half of the regions (54 percent) report increased demand for cottage properties. The report also shows that more retirees are choosing to relocate, with 68 percent of regions seeing a significant increase compared to 2020. Because of the surge in demand, the prices of waterfront properties are up by 13.5 percent to about $498,000, the average price of recreational homes standing at $453,000
In British Columbia, the biggest gains are in Kimberley/Cranbrook (over 27 percent) and Whistler (18.3 percent). Condo prices have also increased by 15.5 percent.
Why Are Prices Going Up
As many businesses, restaurants, hotels, and recreational venues remain closed or are operating at reduced capacity, people don’t really need to be in cities and in a walkable area. It is also true that people are willing to invest more in real estate because they are spending more time at home due to social distancing measures, restrictions set in place across Canada, and lockdowns. As experts note, there are currently two categories of buyers – the first is the worried buyer who believes that the pandemic is never going to end. The second group comprises all those who can do their job from anywhere and have already been working remotely for quite some time. There are other reasons for the recent price hikes, but the main one is that many people are rethinking and re-evaluating their lifestyle, as Vancouver realtor Faith Wilson notes. From shifting to digital and shopping online to changing family and travel plans and health and safety concerns, consumer behaviour is changing which has a significant impact on the real estate market. More people are buying waterfront and ski-hill properties but many are also opting for conventional homes in the countryside. As Royal LePage owner in East Kootenay Philip Jones notes, what they are looking for is raw land.
The ongoing pandemic is certainly driving the exodus to the countryside, with an increasing number of families reappraising urban living. The global health crisis turned the lives of many upside down, from working and schooling to shopping and travelling. Cities where many were born and spent their whole lives now feel like claustrophobic and dangerous places because of repeated lockdowns and tightening and easing of measures. This results in a growing uncertainty as to when and if this will ever going to end. For many, buying a cottage property is like having a place to walk around and breathe, somewhere you don’t stay locked day in and day out. People need more space as their homes have become so central to their lives, with many working, looking after children, exercising, and shopping from home. Cities have long attracted people for the fact that there is plenty to do and crowds of young people socializing. Closures and social distancing simply put socializing on hold. Other factors why people consider relocating to the countryside include distance from family and friends in their community, overcrowding in cities, and lack of gardens.
For others, living and working alongside people who are not following Covid-19 guidelines and social distancing rules is also a factor. There are people moving to the place they grew up to be close to family members and friends. High property prices in metropolitan areas are also forcing many out.
With lockdowns due to recurring outbreaks and waves, more and more people need to be closer to nature. The main reasons impacting purchasing decisions are wanting to have access to a garage or a parking space, to live closer to green spaces, have a pet-friendly home, live in a bigger home, and have a garden. The experience of lockdown in a thirty-story, 2-bedroom condo has made the decision to relocate much easier, especially for those who don’t even have a balcony. Young families with small children are also moving to the countryside to spend lockdowns in more specious properties and to avoid antisocial behaviour due to pandemic fatigue. This is also an option that many families with vulnerable members consider, including those with chronic conditions. Walking along empty streets in cities that look completely deserted feels depressing for many and is forcing them to escape to the countryside. People have all sorts of reasons to relocate, and many have already done that, driving up prices in the cottage country.
People realized they can work from virtually anywhere, so it makes sense to move out of the big cities and go enjoy the nature.
We are seeing crazy prices in cottage country. I’m not surprised at all; the interest rates are at all time low.