This past January was another record-breaking month for cottage real estate, with prices soaring 25 per cent or higher year-over-year in the Lakelands, Kawartha Lakes, Simcoe, and other parts of Ontario cottage country.
When the pandemic hit, experts were predicting that real estate prices would plummet due to the economic downturn. But after a brief crash in the spring, the reality since then has been quite the opposite.
“Last March, we were bracing ourselves for our worst year ever, but we ended up selling all but three of our 70 listings in 2020,” says Ross Halloran, a Port Carling-based Sotheby’s broker who operates extensively in Muskoka.
Halloran says the unprecedented boom of the past nine months is part of an ongoing trend of diminishing cottage inventory and rising demand in Ontario that predates the pandemic. “The closest we’ve ever come to a market this hot was in the spring and summer of 2017, and all gains in the market since then have been driven by price increases as the inventory gets steadily depleted,” says Halloran.
“It’s the definition of a seller’s market,” says Maryrose Coleman, Halloran’s wife and fellow broker at Sotheby’s. “There’s no such thing as ‘market value’ anymore, it’s whatever the market will bear. Sometimes it seems like listing prices are being picked out of a hat.”
In Muskoka, both Halloran and Coleman have witnessed growing demand from urban buyers seeking an alternative local vacation spot due to safety concerns and travel restrictions, as well as from millennials who’ve been priced out of GTA real estate. “But at this rate, they’re also going to be priced out of cottage country in the very near future,” adds Coleman.
While the cottage market typically dries up in the winter months, market activity in these unusual times is expected to remain high until spring, with Ontario recreational property prices forecast to increase 10 per cent by the end of 2021.
“We’ll continue to have an inventory crisis in 2021, but we’re also going to have a new influx of buyer interest,” says Halloran. “So we’re going to see less transactions, but certainly more market value created in those transactions and that will spur growth going forward.”