Niagara Real Estate: Recreational Buyers Active Amidst Rising Prices

Niagara real estate is a sellers’ market experiencing strong buyer demand due to market factors and desirable local amenities. Families are currently driving recreational property sales in the area, with many of these buyers being from the provinces, mostly from the GTA and Halton areas.

Buyers looking to purchase recreational property in the Niagara real estate market are often looking for lower prices compared to city centers or a second home for recreational purposes.

Even as prices rose, buyers were still active in the market, especially for waterfront properties, which often have larger lots and offer better value per square foot compared to other Ontario recreational markets. Brisk recreational property sales across the Niagara region are expected to continue once the Canada-US border returns to normal activities.

Recreational property prices are expected in the Niagara real estate market + 9% increase for waterfront properties, + 7% for off-water homes and + 11% for condominiums until the end of 2021.

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Canada-wide Cabin & Cottage Trends

The glowing demand in the Niagara real estate market is a common thread across Canada as interest and activity in the suburban and rural real estate markets continue to grow. Despite rising demand, 57 percent of Canada’s leisure markets still have at least one property type with average prices below $ 500,000, according to the RE / MAX Recreational Property Report 2021.

That bodes well for the 78 percent of Canadians who plan to buy a property in the next year and consider themselves “leisure buyers”. This is the result of a Leger survey carried out on behalf of RE / MAX.

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More than half of those looking to buy property in the next year (59 percent) are first-time recreational property buyers. Of those planning to buy a recreational property, 21 percent look for recreational prices after being priced out of an urban center. However, low lending rates speak for themselves. 22 percent say the lower interest rates have increased their ability to buy.

The survey also found that 11 percent of Canadians who were looking for recreational property before the pandemic started and are still looking, and 15 percent of Canadians who did not find recreational property before the pandemic are looking now.

The home buying trends sparked by the pandemic are exacerbating inventory challenges in most of Canada’s recreational markets. Growing demand in these regions is also putting pressure on prices, which affects affordability in many recreational markets that RE / MAX brokers expect to see a long-term trend.

“The Canadian recreational property markets are fierce competition among buyers and inventory is low,” said Christopher Alexander, chief strategy officer and executive vice president of RE / MAX in Ontario-Atlantic Canada. “However, Canadians recognize that recreational real estate remains an affordable option in such a turbulent market. There are still many recreational markets across Canada that are considered affordable despite growing demand and prices. “

Affordability outlook

According to RE / MAX brokers and representatives, sellers’ market-like terms are expected to persist for the remainder of the year in 97 percent of the regions examined in the report. These conditions usually go hand in hand with rising prices. This is a trend in 2020 that is expected to continue through 2021. RE / MAX brokers report that 57 percent of Canada’s recreational markets include at least one property type priced between $ 200,000 and <$ 500,000 in reach. That is an 87 percent decrease in 2019.

Some of the cheapest waterfront property recreation areas across Canada include Thunder Bay ($ 425,805), Charlottetown ($ 334,447), and Interlake Region of Manitoba ($ 363,833), while Okanagan ($ 2,430,434), Barrie-Innisfil (1,841,217 USD) and Niagara (USD 1,546,561) the region are the most expensive recreational real estate markets for waterfront properties.

“In today’s real estate landscape, the professionalism of the industry is paramount as increased demand and continued supply put pressure on prices and spark bidding wars,” said Elton Ash, regional executive vice president of RE / MAX in Western Canada. “Leisure markets across Canada are under pressure and without a solution to supply problems we are running out of affordable options for Canadians.”

Unsurprisingly, 41 percent of Canadians in the recreational property market still see affordability as the top buying criteria, followed by proximity to the water or boardwalk, amenities, and good WiFi. With demand for recreational properties expected to remain strong for the remainder of the year, lifestyle factors typically found in townhouses such as restaurants, internet connections and office space are expected to continue to be a priority with buyers.