Sellers Have an Edge in Atlantic Canada Cottage Market This Year

Sellers are in control of the Atlantic Canada cottage market, with 80 per cent of regions favouring sellers, according to the 2024 Cottage Trends Report released by RE/MAX Canada. The trend is notable in St. John’s, NL, as well as Nova Scotia’s Annapolis Valley, Cape Breton and northern regions. This has remained consistent since 2023. In contrast, Charlottetown, PEI is experiencing a balanced market, with average recreational property prices holding steady year-over-year.

Consistent year-over-year price increases were experienced in Northern Nova Scotia (up 57.5 per cent, from $223,433 in Q1 2023 to $351,958 in Q1 2024) and Cape Breton (up 6.3 per cent, from $260,686 in Q1 2023 to $276,982 in Q1 2024). Meanwhile, declines in average price were seen in Annapolis Valley (down 47.8 per cent, from $229,428 in Q1 2023 to $119,750 in Q1 2024) and St. John’s (down 9.1 per cent, from $354,000 in Q1 2023 to $321,750 in Q1 2024).

Looking toward the summer and winter seasons ahead, demand from families, couples and retirees, alongside limited inventory, are expected to continue impacting cottage market sales and prices. Average price in Atlantic Canada is expected to increase by year-end in St. John’s (rising 18 per cent), Cape Breton (up eight per cent) Northern Nova Scotia and Annapolis Valley (rising five per cent). Charlottetown will likely see prices holding steady, averaging $275,000.

St. John’s, NL, Annapolis Valley and Northern Nova Scotia have seen more demand from out-of-province buyers this year, primarily from those relocating from Ontario and Western Canada, but Nova Scotia’s deed transfer tax has started to dampen this activity, especially in the northern region of the province.

In Cape Breton, the decision to hold or sell a property is largely driven by lifestyle. For example, seniors are typically offloading their recreational properties to downsize, while high-net worth individuals seeking luxury living are holding onto properties purchased in recreational communities with amenities such as golf courses. Annapolis Valley has also experienced some offloading due to high interest rates or to purchase a smaller property to “age into.” By comparison, recreational property owners in Charlottetown are retaining their recreational properties due to relative affordability in the region, with owners little impacted by recent interest rate increases. Similarly, recreational property owners in St. John’s and Northern Nova Scotia continue to hold onto their properties, with both regions anticipating only a moderate increase in the number of sales over the next year, rising 6.7 per cent and 10 per cent, respectively.

Despite a limited number of recreational properties available for sale in Atlantic Canada, buyers are holding out for waterfront, followed by properties offering access to recreational activities, large indoor living spaces to accommodate home offices and gyms, and good Wi-Fi access.

National Cottage Market Outlook

From a Canada-Wide perspective, a flood of listings hasn’t hit the recreational property market this spring, and is unlikely to transpire this year. Despite the affordability challenges and higher interest rates that characterized the 2023 real estate market, Canada’s cottage owners are choosing to hold on to their properties in 2024 rather than selling off – a trend that’s likely influenced by the desirable quality of life alongside the prospect of future returns on recreational property ownership. Looking ahead, RE/MAX brokers and agents in Canada are anticipating a national average price increase of 6.8 per cent. Meanwhile, the number of sales is expected to rise in the majority of regions analyzed (61.9 per cent), increasing between three per cent upwards of 50 per cent this year.

Market-By-Market Overview

ST. JOHN’S, NL

St. John’s is experiencing a seller’s market. Inventory is low and there is an abundance of buyers interested in cottages near the $200,000 price point. Inventory is particularly low for waterfront properties, a trend noted post-COVID. Average 2024 sale price across all recreational properties decreased by 9.1 per cent year-over-year (from $354,000 in Q1 2023 to $321,750 in Q1 2024). This change doesn’t indicate a downward market, but is due to a greater number of sales in the $200,000 range this year (doubled year-over-year, from 4 in 2023 Q1 to 8 in 2024 Q1), compared to more sales in the $400,000 range in 2023.

Families and out-of-province buyers are driving recreational property sales. Many Newfoundlanders and Labradorians are looking to come home, and a lot of residences can be used year-round. This trend is expected to continue.

Looking ahead, average sale prices are expected to increase by 18 per cent by the end of 2024, despite being down nine per cent this year. The number of sales will likely increase by 6.7 per cent, from 89 sales in 2023 to 95 sales in 2024.

Buying & Selling in St. John’s

There are no new regulations that are impacting market activity; however, there are some new bans because of the hydrogen project going in (wind energy is being produced in the area), so some land is frozen. This is not impacting the cottage market but some lands have been “frozen,” with the government rezoning in the last year or two.

Out-of-province buyers are coming to St. John’s cottage market from Alberta and Ontario. A lot of Newfoundlanders and Labradorians work in Fort McMurray, and are coming home and buying properties. Many companies in the natural resources sector in Alberta are investing their money into the province, in tourism and cabins in the lake. This has not changed since last year.

The features and amenities most in demand among buyers in 2024 include:

• Waterfront properties
• Quiet neighbourhoods
• Large properties with more outdoor/green space (one acre or more in size)

CAPE BRETON & HIGHLANDS REGIONS, NS

Cape Breton is experiencing a seller’s market. Low inventory and multiple buyers are eager to own, resulting in multiple offer situations on a majority of properties, including in the cottage market.

Families, couples (including young and middle-aged couples) and retirees are driving the bulk of property sales. This trend is expected to continue.

The 2024 average residential sale price across cottages in the region increased by 6.3 per cent year-over-year (from $260,686 in Q1 2023 to $276,982 in Q1 2024). The number of cottage sales decreased by 22.4 per cent per cent year-over-year (from 98 in 2023 Q1 to 76 in 2024 Q1).

Looking ahead, average sale prices are likely to increase by eight per cent, due to low inventory, and low availability of trades people to build on vacant waterfront properties. Number of sales will likely decrease by 15 per cent. Most recreational communities are equipped with all necessities and amenities – people usually take advantage of these unique properties until they are required to sell.

Buying & Selling in Cape Breton & Highlands

Most recreational properties are located within a short drive to the ocean or the famous Bras d’Or Lakes. People moving to the area are immediately drawn to its natural beauty, affordable pricing relative to major Canadian cities and easy-going lifestyle. Buyers are looking for a break from the hustle bustle of the big city, a lot of rural properties provide exactly that, a quiet, private oasis. The recreational market will continue to be a sought-after market. The current average days on market is 40 for the cottage market.

Most buyers are coming from out-of-province, including British Columbia, Alberta and Ontario. This trend is expected to continue. The features and amenities most in demand among buyers include:

• Large properties with more outdoor/green space
• Waterfront properties
• Access to recreational activities (i.e. skiing, water sports)
• Good Wi-Fi access

There is a large senior population who are getting to the stage of their lives where large properties are no longer practical. They are selling their family homes to downsize to duplexes or smaller single-family homes. This is making more properties on large acreages available for younger families and professionals.

Beginning in January 2024, municipalities have made monthly levy payments on short-term rental properties mandatory. This added fee may encourage some short-term rental owners to sell their properties. With increasing living costs, it is becoming harder to make a profit from these types of properties.

People are moving into the region from larger cities because of lower average prices. With working from home an option, there are opportunities for buyers to keep their current position and purchase and live on the water in beautiful Nova Scotia.

Advice For Buyers

• Due diligence is needed. There is a strong seller’s market, with increased possibility of competing with other buyers on unique waterfront properties.
• Keep a close eye on the market and connect with a great realtor to gain a better understanding of relevant trends.
• Don’t wait for the busy spring market to sell. Buyers are ready to purchase now. It is easier to capitalize on an investment when there is less competition.

NORTHERN NOVA SCOTIA

Northern Nova Scotia is experiencing a seller’s market, with 2.84 months of inventory currently. Families, couples (including young and middle-aged couples), retirees and out-of-province buyers are driving sales in the cottage market. If interest rates drop, more buyers are expected from out-of-province.

The 2024 average sale price increased by 57.5 per cent year-over-year (from $223,433 in Q1 2023 to $351,958 in Q1 2024). The number of sales across in the cottage market decreased by 13.3 per cent year-over-year (from 15 in 2023 Q1 to 13 in 2024 Q1).

Looking ahead, average sale prices are likely to increase by five per cent through the remainder of 2024. The price increase for the first quarter was high because of some high-value sales that occurred. Meanwhile, the number of sales will likely increase by 10 per cent by the end of the year, as there are more properties for sale now in the market.

Buying & Selling in Northern Nova Scotia

Properties are taking longer to sell than they did the same time last year. Buyers from out-of-province come from Ontario and the Western provinces. Locally, they come from Truro and Halifax. Buyers from foreign countries include India and China. This has slowed down since COVID-19. The features and amenities most in demand among buyers include:

• Waterfront properties
• Larger indoor living spaces with home offices and gyms
• Good Wi-Fi access

Although there are no new regulations, the five-per-cent out-of-province deed transfer tax has slowed the buyers from out of province from purchasing in the upper end of the market.

Since COVID-19, people are still purchasing properties. Not at the same rate, but markets that were always buyer’s markets before covid are still stable, strong and in the seller’s favour.

Advice for Buyers

If you are thinking of buying, do it now. If the interest rates drop at all, this will bring new buyers to the market.

ANNAPOLIS VALLEY, NS

Annapolis Valley is experiencing a seller’s market due to a combination of low inventory and increase in in-migration. Families, couples (including young and middle-aged couples), retirees, investment buyers and out-of-province buyers are driving the recreational property sales.

The 2024 average sale price across all recreational properties decreased by 47.8 per cent year-over-year (from $229,428 in Q1 2023 to $119,750 in Q1 2024). The number of sales across all recreational properties decreased by 42.9 per cent year-over-year (from 7 in 2023 Q1 to 4 in 2024 Q1).

For the remainder of 2024, average sale prices are likely to increase by five per cent, while the number of sales will likely decrease by 15 per cent.

Buying & Selling in Annapolis Valley

Waterfront properties and large acreage properties are high in demand with out-of-province buyers and locals seeking a home away from home. If priced correctly, the number of days on the markets should be low. This has not changed significantly since last year. Buyers from out-of-province come from Ontario and BC. Locally, they come from Annapolis Valley. This has not changed since last year. The features and amenities most in demand among buyers include:

• Large properties with more outdoor/green space
• Waterfront properties
• Good Wi-Fi access

The market is experiencing a small amount of offloading in the cottage market, due to interest rates and “ageing out.” However, since COVID-19, there is a desire for a peaceful gateway, and additional income continues to be a strong aspiration for buyers.

Advice for Buyers

Lower interest rates will bring more buyers (and competition) into the market, so if you are thinking of buying, do it now.

CHARLOTTETOWN, PEI

Presently, the cottage market in PEI is balanced, with couples and retirees driving the bulk of recreational property sales. The average 2024 sale price held steady year-over-year (from $275,000 in Q1 2023 to $275,000 in Q1 2024), while the number of sales declined by about half (down 46.7 per cent year-over-year, from 15 in 2023 Q1 to eight in 2024 Q1).

The expectation for 2024 is that prices in the cottage market will stay steady. Getting into the spring market, when people are starting to think about summer and beaches, sales will likely increase marginally Average price has declined 8.8 per cent over the last two years. This is a good position to represent both buyers and sellers in a fair manner.

Buying & Selling in PEI

PEI has a short cottage season, running from May through October. Intra-provincial buyers are coming from the more densely populated communities in PEI. This has not changed since last year. The features and amenities that are in highest demand in 2024 include:

• Waterfront properties
• Access to recreational activities (i.e. skiing, water sports)
• Beach access, rental

PEI’s recreational market is still very affordable comparatively speaking, and most people in the market can adjust to a bit of the interest rate increases. It boasts the luxury that many cottage communities are very rentable, so owners – especially newer younger owners – can offset the cost by renting.

Short-term rental bans have not impacted recreational units as yet. There is legislation around licensing and registering with the province – but that more focussed on ensuring quality and setting standards to protect the consumer.

The biggest trend since COVID-19 would be waterfront converting to more year-round homes, which comes with its own challenges including roadway maintenance, etc.

Advice for Buyers & Sellers

• Buyers: Make sure you can afford upkeep and maintenance.
• Sellers: Price realistically and your property will sell.