In a recent article from Canadian Real Estate Wealth written by Justin da Rosa - Justin noted that Cottages are a hot investment option for Canadians, and they may be one of the few properties overlooked by foreign buyers.
He noted that Royal LePage recently released a comprehensive report on the recreational real estate industry in Canada, entitled the 2016 Canadian Recreational Housing Report, which found a growing number of investors are turning to this lucrative segment.
According to the report, 49% of recreational property buyers purchased for the purpose of investing; 64% of advisors polled said potential purchasers purchase for the sake of retirement.
Additionally, low rates are encouraging purchases of recreational properties.
Noted in the Royal Lepage Report
An already short two hour drive from Toronto continues to shorten as a highway expansion makes escaping to the tranquil East Kawarthas even easier. A chain of lakes on and surrounding the Trent-Severn Waterway in south-central Ontario, the East Kawartha region offers the perfect setting for a wealth of activities, from boating and outdoor water sports to quiet cottage living and exploring farmers markets, restaurants and shops.
Most recreational property buyers within the region are couples with young children, a trend which has seen younger buyers become more prevalent in the region over the last five years. With the majority aged between 36 and 51, they accompany the large baby boomer demographic which continues to relocate to the region from the Greater Toronto Area (GTA) for their retirement years.
So far this season, sales activity in the region has increased significantly compared to 2015, while prices have seen slight increases. Lakefront properties remain the highest in demand with an average price of $700,000, while island and riverside properties have followed averaging $550,000 and $400,000, respectively. Non-waterfront cottages as well as those located in wooded areas average $350,000.
Just 90 minutes northeast of Toronto, the Kawartha Lakes region features over 250 lakes nestled in pristine Ontario wilderness. This “land of shining waters”, as named by the local First Nations, is crisscrossed with winding rivers, 800 kilometres of trails to hike, cycle, or ski on, and many charming communities to explore during all four seasons.13
Typical recreational property buyers within the region can be classified as Gen Xers between the ages of roughly 36 to 51, and mainly couples with young children. Baby boomers and retirees once sought out properties in the area with the intention of using them as primary residences, but many are now returning to cities, often due to the maintenance needed with recreational properties.
Many of those purchasing properties in the area desire the cottage lifestyle. Ideal properties are winterized and move-in ready, requiring no major renovation work. Local buyers
are predominantly from the GTA, and most travel no more than a couple of hours as an escape from city life. Interest from foreign buyers is very low, with the few Americans who previously were buying properties in the area now choosing to shop at home instead.
Prices and sales within the region have increased slightly year-over-year, with the proximity to the GTA triggering increased demand for properties since May of 2015. Supply has decreased, with properties staying “in the family”, especially
if the waterfront is of good quality. The current average price
of a lakefront property sits at $695,000. A spot on the riverside averages $350,000, with resort/condo properties averaging $145,000. Looking forward, sales activity is projected to remain steady in 2016.
If you have a question or would like more information about investing in cottage property don't hesitate to call me. Buying a cottage is quite different than a home in the in the city or subburbs. Knowledge is key when buying a rural or cottage water front property. My dream of owning a cottage on Chandos Lake in North Kawartha came true in 2000 and I have been helping clients dream of owning a cottage come true for the past 15 years.