Cottage market remains hot, says Royal LePage
The cooling that has recently wafted across Toronto-area home sales isn't expected to make its way to cottage country this summer, according to a recreational property report from Royal LePage.
Sales and prices are up in many Ontario resort areas and will likely stay that way because a cottage buyer tends to have a higher net worth than a consumer shopping for a primary residence, said Royal LePage Real Estate Services Broker, Patrice Gale.
"They're less reactive to changes in the primary residential markets but just as responsive to the forces of supply and demand," Gale said. .
The company's annual Recreational Housing Report is based on a May survey of 51 Canadian agents and brokers, 63 percent of whom reported an uptick in prices and sales this spring.
That trend is expected to hold because inventory is tight, and the consumers who are shopping aren't first-time buyers, but rather homeowners who are investing their equity in vacation properties said, Gale..
The report puts the average Ontario cottage price at $413,000. That is an aggregate of all categories ranging from resort condos to waterfront spots on lakes, rivers, and islands to wooded areas with no water access.
But Gale says there is a huge variation of vacation property prices.
In Ontario, Muskoka is still the costliest place to buy a cottage, with an average price this spring of $1.5 million.
Property within a two- or three-hour drive of the Toronto area is the most popular, says the report.
While 60 percent of survey respondents said those in the 36- to 51-year-old age group were the predominant buyers, 40 percent said baby boomers aged 52 to 70 per cent comprised the largest group of buyers.
Foreign buyers account for 5 percent or less of vacation home purchases, said 77 percent of those surveyed.
While prices were also up in Kawartha Lakes, Meaford, Thornbury, Collingwood and Niagara-on-the-Lake, areas such as Southwestern Ontario, St. Joseph Island and Lake Huron retained prices that were about the same as last year.
"There are pockets still further out from the GTA that are still relatively affordable," said Gale.
Lakefront cottages in Honey Harbour averaged $477,000. In Orillia and South Muskoka, lakefront property averaged $608,000, while Niagara-on-the-Lake was nearly as expensive as Muskoka at $1.2 million on average.
The wet, cool spring has slowed building and delayed some cottagers from opening their summer homes, said realtor and builder Bob Clarke, president of Royal LePage Lakes of Muskoka Realty - Clarke Muskoka Realty.
"We expect to see sales activity increase in short order, as a great deal of demand is unleashed onto the market," he said, in the report.
"In certain markets, any property with a purchase price of less than $1 million sells very quickly, and while fewer purchasers require mortgages to finance new properties, low-interest rates to create an upward pressure on pricing as well," said Clarke.
Ontario has the third-highest cottage prices in the country, just behind the national average of $439,000. The highest prices were in Alberta, where a shortage of lakefront land contributed to an $816,700 average price, followed by British Columbia, which had a $595,100 average.
For the full Ontario Recreational Property Report: https://docs.rlpnetwork.com/RLPRecReport/Royal_LePage_2017RecreationalReport_Ontario.pdf
Author: Tess Kalinowski from RLP.