Paradise cost
GTA cottage buyers face higher prices and thinner supply
Are we there yet? That sweaty journey up the highway for a weekend escape is getting longer. As favourite cottage country locations of GTA residents soar past the $1 million mark, buyers are looking farther afield, where added kilometres add up to waterfront savings,
As the pandemic wanes this summer, Toronto-area cottage hunters are facing sellers’ markets from Muskoka to Haliburton, the Kawarthas to Prince Edward County.
Retirees and telecommuters looking to slow down their lives and get closer to nature — and often closer to their children and grandkids — are buying up homes in traditional resort areas across the province, frequently converting two- and three-season properties to year-round residences.
The result is higher prices — and less selection — for GTA cottage buyers in traditional summer property regions, forcing many to look to more remote areas for cooling lakeside breezes.
Realtors say the old line between vacation homes and primary residences has become blurry. Trends that began before COVID-19 have accelerated in the last year, said Pauline Aunger, a Royal LePage agent in Smiths Falls.
“God’s not making any more waterfront,” she said. “He’ll always build another subdivision.”
In March, Royal LePage predicted vacation home prices would climb 15 per cent in Canada and 17 per cent in Ontario this year. A Re/Max recreational property report on Thursday forecast cottage prices to increase another 25 per cent this year in some Canadian markets.
Of the 22 resort areas Re/Max analyzed, most of those within two hours of Toronto had average waterfront property prices of more than $1 million, including Orillia, Barrie, Port Colborne/Wainfleet, Collingwood, Grand Bend, Huronia, Niagaraon-the-Lake and Peterborough.
Only two markets had average waterfront home prices below $500,000. Sudbury, Manitoulin, French River — more than four hours away — had an average price of $291,909, still 54 per cent higher than 2019. Thunder Bay, a 15-hour drive up the coast of Lake Superior, had homes on the water selling for $425,805 on average, only four per cent above the pre-pandemic price.
From January through April, waterfront property was white hot in eastern Ontario’s Land O’Lakes, said Royal LePage agent Chris Winney. In April, a waterfront home next to a busy marina went on the market on a Tuesday for $729,000. On Thursday it was sold with a bully offer for $1.1 million, she said.
The provincial lockdown has slowed activity in recent weeks, according to Winney.
“It’s the GTA people who are coming out and they’re the ones trying to do bully offers and sometimes they’re very successful,” she said. “It’s up to the seller to determine whether they are going to pay attention to a bully offer, or are they going to wait for all the offers to come.”
Fifty-nine per cent of those planning to buy a vacation home this year are first-time purchasers, according to a Leger survey for Re/Max.
Twenty-two per cent of those Canadians surveyed said they were seeking recreational property because they had been priced out of cities. The same percentage indicated that this year’s low interest rates are boosting their ability to buy.
The survey also found that 11 per cent of Canadians were searching for a recreational property prior to the start of the pandemic and are still searching, and 15 per cent of Canadians who were not searching for a recreational property prior to the pandemic are now looking.
Re/Max says more families are seeking affordable housing north of Toronto, helping to push the average inland selling price in Muskoka to $619,799 this year. Waterfront homes sell for more than twice as much in that area, averaging $1.48 million this year. That will rise to $1.71 million on average this May through December.
East of Toronto, Lake Ontario food and wine destination Prince Edward County is increasingly driven by retirees and telecommuters, who expect the pandemic’s work-from-home provisions to stick once offices reopen.
Waterfront real estate there has been selling for an average $843,975 this year, 24 per cent above 2019 prices, said Re/Max. It is expected to hit an average $928,372 between May and December. Re/Max says it has shown 2019 prices as the last “normal” year as prices made such an extreme jump last year.
Elsewhere, Re/Max reports: á Peterborough Kawarthas area waterfront is averaging $1.1 million this year to date. That is 70 per cent above 2019 prices. It is expected to hit an average $1.14 million by year’s end. á Haliburton waterfront sold this year for an average $896,471, 62 per cent more than last year and Re/Max anticipates it will be $1.03 million May through December. á Barrie Innisfil properties average $1.84 million on the water, a 72 per cent gain since 72 per cent with Re/Max forecasting a May through December average of $2.03 million. á In Orillia, waterfront homes have been selling for an average $1.15 million this year, 38 per cent more than 2019. They are expected to rise to an average of $1.21 million in the balance of this year.
If you’re looking to spend less than $500,000 on your vacation property, you’re likely buying a condo in Muskoka, Niagara-on-the-Lake or Haliburton, according to Re/Max.
Or you’ll need to drive quite a lot farther from Toronto. Thunder Bay, about a 15-hour drive from downtown Toronto, was reported to be the most affordable vacation market in the country, averaging $425,805.
The most expensive resort area was Niagara, about an hour and a quarter from the city.
The Toronto Star looked at some of the waterfront properties available or recently sold in Ontario. Even in relatively remote areas, real estate agents report GTA residents’ search for space outside the city has boosted prices and depleted inventory.