Property prices in Ontario’s ski regions saw a steep drop in 2023, falling 10.1 per cent during the first 10 months of the year, according to a new report by Royal LePage.
The report, which was published Wednesday, says that the average price of a recreational property in Southern Georgian Bay, which includes Collingwood, Meaford, and Thornbury, slid to $800,000 in 2023, while the median condominium price decreased 8.9 per cent to $640,000.
Softening consumer demand, the report adds, has been the result of high interest rates and higher costs of living in general.
“Since March 2022, the Bank of Canada has raised the overnight lending rate 10 times, lifting its policy rate to a more than two-decade high. Coupled with the rising cost of living, increased borrowing costs have produced a cooling effect on recreational markets, similar to the one felt in the residential segment, although to a lesser extent,” the report notes.
“Forty-one per cent of recreational property market experts reported an increase in properties for sale in their respective markets as a direct result of rising interest rates, compared to last year. The Bank of Canada is widely expected to hold its key lending rate steady at the next announcement in December.”
Total sales in Ontario’s ski regions in the first 10 months of the year saw a 2.7 per cent increase from 2022.
“Despite some buyers feeling paralyzed with uncertainty over interest rates and a potential recession, sales have remained stable in the region. Recreational home prices have softened due to reduced buyer demand compared to 2020 and 2021, which is causing some frustration among sellers whose pricing expectations are not being met,” Desmond von Teichman, a broker with Royal LePage Locations North, said in a written statement.
“So far, most homeowners have been able to cope with higher interest rates, though we do hear the occasional anecdote of residents offloading their properties as a result of rising monthly mortgage costs.”
The company is forecasting that the median price of a single-family detached home in the region will rise by 4.5 per cent over the next 12 months, as “market conditions continue to trend towards historical norms.”
Across the country, prices for recreational properties in Canada’s most popular ski regions remained relatively flat, seeing a 0.7 per cent decrease in the median price of a single-family detached home in 2023.
While prices in some regions saw notable declines, other areas, including Mont Tremblant, experienced healthy price gains.
The popular Quebec resort community saw the median price of a single-family detached home increase by 7.8 per cent year-over-year.
“Although recreational real estate markets vary greatly from one region to the next, activity on the whole in Canada’s winter recreational communities has noticeably slowed. Annual sales are down in most regions and inventory has climbed modestly as the market continues to regain balance,” Pauline Aunger, broker of record for Royal LePage Advantage Real Estate, said in analysis accompanying the news release.
Aunger noted that market activity is returning to “historical norms” following a period of “unprecedented” activity during the COVID-19 pandemic.
“In addition to a return to normal work and social routines, today’s elevated interest rate environment has exacerbated this cooldown, as consumers are more concerned about mortgage expenses and the overall economy, including those shopping in high-end recreational markets.”