Real estate boom not limited to cities as recreational properties are red hot
Cottage prices and sales volumes are both staying very high,
Fast rising home prices in large urban centres may also be contributing to the increase in sales of recreational properties in this country, say some real estate experts.
More people are using the equity in their homes in the city to finance their cottage. They’re not getting a second mortgage on the cottage, they’re getting a line of credit or a bigger mortgage on their city home. Low interest rates are also helping drive up sales in cottage country.
“This year, it’s been great, been busy. Sales have been up over last year, in terms of our spring market.” That goes for recreational properties — whether you call them cottages, cabins or camps — across much of Canada, according to a recent report.
Recreational property sales and listings have rebounded from a slow start due to the brutal winter and very late spring in many areas across the country. The recreational property market is healthy and should continue to experience modest increases in sales and prices.
Buyers are choosing to spend their money at home instead of in the U.S., where property values have also rebounded since the recession. Prince Edward Island remains one of the more affordable areas for recreational property, with oceanfront cottages starting at about $180,000.
Most properties for sale in P.E.I. right now are listed for less than $300,000. In Ontario, the median price for properties in the Collingwood region increased by 6.8 per cent between May of 2013 and May 2014.
Haliburton was one of the few regions in Ontario where the cost of a cottage went down, with the median price for a recreational property dropping less than one per cent from $342,000 to $340,000. The Muskoka region remains among the priciest in Canada, with prices ranging from $400,000 to $7.35 million for high-end, waterfront homes.
Provost says they are making good use of their investment. “We’re here every weekend and predominantly throughout the summer with the kids. My husband will be driving back and forth into the city.” While many associate Muskoka with million-dollar properties like Provost’s, agent Jenn O’Brien says there are still options for those without a seven-figure budget. “There are some smaller surrounding lakes where the prices are a little bit lower and a little bit more affordable for everybody,” says O’Brien. “It’s not just the million-dollar properties — there are a lot of those properties that are moving this year, but definitely there are surrounding lakes that you can get onto for a much more affordable price.”
Some advice from the experts for finding that hidden (read: less expensive) gem? Go for a riverfront instead of lakefront, rivers are generally not as expensive as lakes. Or look for a property that is close to but not directly on the water. Prices can drop precipitously for land-locked properties. Be willing to go farther afield. If you’re willing to drive more than three hours from a major urban centre, there may still be inexpensive options. But if you want perhaps the cheapest option for a recreational property, you may want to try renting.