Recreational properties are in demand
As home prices in Manitoba continue to rise and workplaces allow for more flexible work schedules, many are looking for opportunities to enter the housing market in cottage country.
The frantic pace of buying can be sourced back to the pandemic, as with much in real estate today, which sent many Canadians rushing to find more space for their families.
According to MLS listings, 279 Manitoba cottages sold last year, compared to 224 in 2020 and 142 in 2019.
Twenty-one per cent of Canadians are looking to recreational markets after being priced out of an urban centre, according to a RE/MAX report last year.
While it’s still too early to have a sense of this year’s demand because of the cooler Manitoba weather, there is a general expectation among brokers that demand will continue to outpace supply.
“I believe that cottage sales will continue to be strong for the foreseeable future due to our proximity to Winnipeg and the ability for people to now work from home,” says Tyler Bucklaschuk, a broker with Royal LePage JMB & Associates in Gimli.
Data from Royal LePage’s Spring Recreation Property Report predicts single-family home prices in Canada’s recreational regions will increase by 13 per cent in 2022, with demand for properties outpacing the number for sale.
The price hike wouldn’t be as steep when compared to 2021—the real estate firm said properties increased in value 26.6 per cent compared to 2020—but people are still hungry for real estate in cottage country.
Royal LePage’s analysis shows that cottages in Gimli and the Interlake went for an average of $218,000 last year, up 12.4 per cent. The prairies are the second-most affordable housing market in Canada behind Atlantic Canada.
According to the Report, 84 per cent of real estate experts surveyed said there is less inventory this year compared to 2021. Nearly nine in 10 respondents noted at least 75 per cent of the properties in their region are selling over the asking price.
Despite a return to pre-pandemic spending and interest rate increases, demand for recreational properties continues to rise.
“In 2020, we went into the spring and suddenly people were keeping cottages and not selling them—so we had less inventory right off the get-go,” says real estate broker Shanna Karle with Ateah Realty, which services the beach communities on the east side of Lake Winnipeg. “And then comes the supply and demand issue, which then causes the prices to go up. And that’s still the case today.”
Karle says people who were considering selling their cottage pre-pandemic have now held onto them.
“It’s like people fell in love with their cottage again,” she says. “Now, because they’re working from their home-slash-cottage or they can’t go on holidays with their kids, they go to the cottage. They might sell it this year, or they might hang on a couple more years because they’ve made some fond memories.”
As a result, fewer properties are hitting the market, driving up demand and resale prices. Karle thinks the seller’s market may continue through 2022 but it’s still early in the season.
“Things have been steadily increasing, just like everywhere else,” Karle says. “And we’re still seeing the increase, but it’s too early to tell. I know that things this spring, though, are selling higher than they would have sold in the fall.”
With little travel abroad over the last two years, cottage rentals have also become increasingly popular as more people have been staying in Manitoba’s backyard and exploring cottage country.
“The one thing I have noticed an increase in is people purchasing for rentals,” Karle says. “For some people, it’s like a dual purpose; they can use it like a retirement package or an investment. People rent cottages by the week here so it can be a very nice investment property.”
