Ontario’s cottage country real estate is seeing a boom since the COVID-19 pandemic took hold as city-dwellers look to the great outdoors for more space.
“It’s probably the strongest market that I’ve seen in many, many years,” Chestnut Park CEO Chris Kapches said. “[Cottage country] has been operating at least 50 per cent better than what it was a year ago — and last year was a particularly strong year.”
Chestnut Park does real estate business in Collingwood, Georgian Bay, Muskoka, Haliburton and Prince Edward County.
Kapches credits this year’s particularly strong market to a combination of factors. Number one is the pandemic, which has caused people “to want to escape dense urban environments.”
“Clearly if you’re in cottage country, the environment is not dense,” he said. “You have lots of space, you have sanctuary.”
Secondly, Kapches said the pandemic has accelerated an already developing phenomena — working remotely. Using technology, people can now work from almost anywhere, as long as there is an internet connection, and have been doing so during the pandemic.
Now, many employees say they want to continue remote work practices even after the pandemic, so it seems like the trend is here to stay. Since you can work from anywhere, wouldn’t you prefer the great outdoors to the cramped city?
The third reason is economic, Kapches said. While many have lost their income due to the pandemic, it has also dropped interest rates to a historic low of 2.3 per cent, which many are taking advantage of.
“It is relatively easy to finance a cottage or rural property now under the circumstances,” Kapches said.
Lakelands Association of Realtors President Catharine Inniss thinks the boom is partly due to travel restrictions that have some Canadians opting for a stay-cation instead, as well as the volatility of the stock market creating a desire to put money into a “safer place.”
“There’s nothing like investing your money in something that you can enjoy while it is accruing value,” she said.
And investing is what people are doing. Surprisingly, Kapches said out of all of cottage country, Muskoka — the priciest area of the bunch with prices up to $3 million at the popular lakes — is doing the best in sales.
According to Inniss, sales in Muskoka have reached nearly $200 million this year, up from $130 million last year.
However, there is a caveat, and that is the limited amount of stock in the market.
“A concern on the horizon is a lack of supply,” Kapches said. “Supply is about 35 to 50 per cent behind where we were last year.”
The reason for a lack of supply is that cottage owners are much more reluctant to sell than homeowners in Toronto.
“The sale of cottage properties in most cases is purely discretionary, unlike sales in urban environments that are often driven by necessity,” Kapches said. “If you don’t have to move, you don’t have to sell your cottage, and as a result, supply dwindles. Unfortunately, given the environment that we’re in now, it has dwindled to the point where it’s chronic.”
Inniss though doesn’t see the situation as that dire and said that there are still lots of properties on the market. However, she does recommend for buyers to use a local agent that knows the area well to find the juicy properties.
Given the relatively low stock and competitiveness of the market — Inniss said this year properties are selling at around 23 days compared to 132 days in 2017 — a local realtor can let you know of new listings immediately.
“If you come with somebody from the city you live in, they don’t know the market,” Inniss said. “You can run into a lot of pitfalls.”
The market competitiveness has given sellers a very good price, which can entice them to put their property on the market, according to Kapches. Muskoka cottage sales are up by about 88 per cent compared to last year, a recent Chestnut Park analysis found.
And it seems like the good times will keep on rolling. Both Kapches and Inniss fully expect the market not to cool down once pandemic measures lighten.
“I guarantee it’ll continue assuming there’s enough supply,” Kapches said. “People’s psychology and attitudes have changed. [The pandemic] has changed the way that we live.”