Why cottage ownership is increasingly out of reach for most Canadians

Kevin Byles is a cottage owner and real estate agent living in Kawartha Lakes. His property is a four-season cabin with 900 feet of shoreline on 30 acres overlooking Big Bald Lake outside of Buckhorn, Ontario.

Anne-Marie Jackson / The Globe and the Mail

Kevin Byles has seen something this year he’s never seen before in cottage country: over 100 people showed up to a realtor’s open house and multiple offers are pouring in by the dozen.

“In one case there were 36 offers for a cottage and in another there were 31 offers,” recalls Mr. Byles, a Royal LePage agent with Glenhome Real Estate in Toronto and a cottage owner of second generation whose family is from the Kawartha Lakes district in Ontario. back to 1960.

“There is a real thirst for chalets – the [real estate] rural market agents have never experienced this.

The story continues under the ad

The latest market statistics support Mr. Byles’ observation. A Re / Max report released in May said 2021 was a cottage sellers market across the country, with low inventory and high demand. In 2020, cabins priced under $ 500,000 represented about 60% of recreational markets, up from nearly 90% in 2019.

Charlottetown, Prince Edward Island, was home to the most affordable waterfront properties, according to the report, while Okanagan, British Columbia was the most expensive. In British Columbia and parts of Atlantic Canada, cottage sales were driven largely by out-of-province buyers drawn to a recreational lifestyle and the relative safety of the Maritimes during the COVID pandemic -19.

In Manitoba, the surge in sales can be attributed primarily to families, millennials and investors looking for affordable options beyond urban centers.

“In Ontario, if you thought that the urban or suburban markets are financially difficult, you would be shocked to see the trends emerging in the cottage country,” says Byles.

It highlights the dramatic year-over-year increases in sales and median prices from April 2020 to April 2021. In Muskoka, sales increased by more than 240% while the median price increased by 53% for reach $ 625,000. In the Kawarthas, sales jumped 273% while the median price rose 50% to $ 591,200.

The numbers were particularly startling in Parry Sound, which saw a 367 percent increase in sales and a 70 percent increase in median price to $ 491,000.

Corey Breau, president of the St. John Real Estate Board in New Brunswick – which has seen average selling prices rise by as much as 132% since 2019 – says the high prices have persuaded some cottage owners to take advantage of the family vacation home.

The story continues under the ad

While it may seem like a sad loss of family heirloom, it’s not always a bad thing, says Breau.

“We’re seeing areas that weren’t desirable before they became desirable as new people move in and fix them,” he says. “They bring old cottages back to life that looked rather shabby.”

So what does all of this mean for property hunters who are keen on buying a cottage?

Justin Fraser, a senior financial planner based in Barrie, Ont. And cottage specialist at Meridian Credit Union, says the higher prices have made it more difficult for some people to qualify for a cottage mortgage.

Those who tell their bank that they rely on income from renting the home on Airbnb will likely be disappointed.

“If you’re considering a long-term rental, most banks are fine with that,” he says. “But if you even mention Airbnb, a lot of banks will just close the app.”

The story continues under the ad

To find a cottage within their budget, some buyers move away from the city. Mr. Fraser has seen customers venture as far as North Bay, a four-hour drive from Toronto.

He also saw several families or friends come as joint buyers. For these arrangements, Fraser recommends formal agreements that provide for events such as non-payment of a portion of the mortgage or the death of one of the owners.

Some cottage seekers find affordable purchases beyond their home province. Barry MacDonald, a Re / Max agent in St. John, New Brunswick, says cabins in desirable areas such as Belleisle Bay and Washademoak Lake are always a good deal compared to those in hot spots. from Ontario or British Columbia.

Mr. Byles and his wife, Victoria Valius.

Anne-Marie Jackson / The Globe and the Mail

“You can get a nice cottage here ready to move in for $ 250,000,” he says. “So we had a lot of buyers from Ontario, a few from British Columbia and Alberta, and also a lot of Americans.”

A number of these buyers are not just buying a summer home. With a third of Canadians now working from home due to the pandemic, the idea of ​​year-round living in a cottage has caught on with many city dwellers.

Mr Byles himself has retired to the chalet with his family, where they have been living and working since March.

The story continues under the ad

However, with more and more people coming to its rural corner of paradise, the roads are busier and local resources are more strained, including people.

“You have local independent contractors who can do one or two builds a year and now take on more than they can handle because they can’t find the trades people they need to handle the volume.” , explains Mr. Byles.

There is also fierce competition for toys and attributes of cottage living. Mr. Byles notes that a number of marinas in the Kawarthas no longer have jet skis – a significant issue that also affects retailers of motorcycles, all-terrain vehicles and all-terrain motorcycles.

“Cottage communities were never really designed for that kind of volume, so it’s an adjustment for retailers and businesses,” says Byles. “But there’s no question that for rural municipalities it’s good for the economy.

But there is a limited inventory of traditional cabins, as defined by a standard that requires, first and foremost, a waterfront location. Mr. Byles sees a potential extension of this definition to include small developed communities that offer shared access to the lake, as well as upscale condos and townhouses in cottage areas along or near lakes or rivers. rivers.

“Some of these options can be viewed as retirement plans for baby boomers, others will be viewed as options for those who cannot afford or are unable to secure individual lakeside properties. , but wish to be on or near a recreational lake with a decent commute time, ”Mr. Byles said.

The story continues under the ad

These chalet-style options can also be appealing to those who wish to live in the countryside, but still prefer a home designed for all-season use. So was Teri Morrison, a continuing medical education writer who sold her condo in Toronto last year and bought a house about two hours north in Tiny Township.

Ms Morrison has lived at the cottage since childhood and planned to live full time before the pandemic hit. When Ontario went into lockdown, she decided it was time to leave town for good, but opted for a house over a traditional cottage.

“I looked at cottages remodeled like a house, but they were so small and I was like, ‘How am I going to live in a little cottage all year round, really?’ Says Ms. Morrison. “Instead, I bought a house with a cottage feel on a quiet side street in a township with several beaches, one of which is a 15-minute walk from my house.”

A bonus: Mrs Morrison’s house, which has a home office and a spare bedroom, was cheaper than the small cottages she had visited.

“I wanted enough space for people to come and visit me,” says Morrison. “And people really want to visit.”

Comments are closed.