Demand, prices up in cottage country
Agents see pandemic increasing interest in Atlantic Canadian recreation properties
ST. JOHN'S, N.L. — People snapped up Atlantic Canadian recreational properties in the first nine months of 2020, driving prices up by nearly nine per cent.
Royal LePage says the run on cottage country properties happened because many Atlantic Canadians were looking to move from the city, and buyers from outside the region, perhaps encouraged by the pandemic, were doing the same.
The Canadian real estate company said in a news release that single-family homes in Atlantic Canada's recreational property market were 8.6 per cent more expensive year-over-year in the first nine months, to an average price of $187,564.
Nationally, prices rose by 11.5 per cent, to an average of $453,046. Waterfront property increased by 13.5 per cent to $498,111.
Royal LePage asked its recreational property sales people to find out why. Seventeen out of 20 reported an increase in buyers who were interested in working remotely from a property.
Specific to Atlantic Canada, the release said most areas surveyed in the region witnessed a significant increase in buyers looking at recreational properties as a primary residence. The company is forecasting a price increase of seven per cent for recreational home properties in the region for 2021.
Glenn Larkin, an agent who deals with the eastern half of Newfoundland, said that in addition to locals buying up vacant land in places like the Brigus Junction and Ocean Pond areas, there was significant interest in recreational properties that had been on the market for quite some time. That included some expensive waterfront in places like North River and Conception Harbour.
"Wherever there were places where there were smaller residences, old residences that you could buy as a summer place, they all got picked over and picked through throughout the summer and into the fall," Larkin told The Telegram on Monday.
"If there were small units, $100,000 to $150,000 and upwards to $250,000, they certainly got sold."
MOVING BACK
He said he knows of people from the province who sold expensive homes elsewhere in the country in order to move back to Newfoundland and Labrador simply because the pandemic was less of an issue there compared to big cities on the mainland.
"Why stay in Ontario if you're retired and you've got the opportunity to move home," Larkin said.
"The market was busy up there. Not as busy here. Sell high, buy lower and be happy the rest of your life — until you realize you've got to go to Florida for a break."
In the Annapolis Valley, Royal LePage Atlantic sales representative Kirk Richards has witnessed strong demand for recreational properties but he does not see much of a direct link between that interest and the pandemic itself.
"There are local purchasers at a lower price point that are looking to act and get a recreational property if they don't already have one, or sometimes it would be a family member or relative that has a cottage in the immediate area," Richards said.
"One comes on the market and they're either purchasing that for a family member or referencing that to a relative. Seems like people want to be grouped within reasonable proximity to one another, if that option becomes available.
"The other big demographic that's buying in our market is out-of-province purchasers. Either they're coming here to retire or relocate for work, but they're also using those recreational properties as residential, yearround homes in some cases."
The Annapolis Valley recreational properties market over the last five years has been consistently strong and shown lots of growth, he said.
"I can't say we're attributing a huge amount of this growth on the pandemic, in particular," Richards said.
"I think the demand has been there for some time. The inventory remains very low and therefore it just really drives that to be a seller's market for that particular category."
Richards expects demand for recreational properties will remain strong and continue to grow in 2021. Unless the cost of building materials changes, he expects the inventory will remain low.
In Newfoundland and Labrador, Larkin is less optimistic about what the new year will bring, given the level of economic uncertainty swirling through the province. He also said he believes once a vaccine for COVID-19 is widely distributed, interest in these properties will slow down.