Cottage sales booming as buyers seek out lakeside bargains
By Susan Pigg | Mon Jun 18 2012
The call of the loon — as well as lots of choice and a few bargains — is drawing Canadians back to the lake in numbers not seen since 2008, according to a report on the cottage market released Monday by Re/Max.
Sales are up in 70 per cent of Canadian markets examined for the annual study and on a par with last year in another six per cent.
But prices remain soft, or even depressed, in most areas of the country — and those who are opting for cottages aren’t willing, for the most part, to spend more than $400,000, the study found.
Some high-end luxury markets, such as Muskoka, however, are seeing higher demand for the $1 million-plus showcase cottage, largely because prices have fallen to more reasonable levels, the report notes.
“Renewed consumer confidence is the true driver,” of what is seen as hopeful signs of activity in a market that has been sluggish since the Great Recession, says Michael Polzler, executive vice president of Re/Max Ontario and Atlantic Canada.
Low interest rates are also a major factor, although would-be cottagers remain cautious.
While there are some shortages of entry level properties, activity is “exceptionally healthy” and supply strong as the boomer market softens — with fewer buying and more selling to free up cash as their kids leave home.
That’s opened the cottage door to a new generation of buyers — young couples with children, the report notes.
“Clear evidence of a recovery exists in Ontario’s recreational property markets,” says Re/Max. Some 71 per cent of all regions of the province reported sales have increased or remained on a par with this time last year.
But prices have been slow to rebound: Prices have dropped or stayed the same as last year in 71 per cent of cottage areas studied for the report.
The call of the loon has been especially strong in areas like Grand Bend, Orillia, Huntsville and Parry Sound this spring, says Re/Max.
Only five Ontario markets saw a slight dip in prices, but most of them are expected to catch up quickly this summer.
“Buyers are very selective this year,” notes the report.
They are avoiding overpriced places altogether, willing to travel further to get a better deal or even buy a backlot place — just off the water but with access — to keep costs down.
A lack of affordable, entry level cottages is being felt in some regions, especially in the Huntsville/Lake of Bays area where realtors are seeing bidding wars for the first time in years on properties priced at $400,000 and under, the report says.
That’s pushed average prices in that popular area up by 10 per cent in April over a year earlier.