If you thought the real estate market in the city and suburbs was exploding all over Ontario, it’s no comparison to what’s happening in cottage country. Since the start of the pandemic, The Canadian Real Estate Association has been reporting Canada-wide price increases to detached and semi-detached homes – average home prices increased by 16.5 percent in the Greater Toronto Region alone. That’s a healthy growth rate but compare that to the Kawartha Lakes region and imagine a staggering 36.9 percent increase in average prices in March of 2021 compared to the same time last year. The Muskoka region, Haliburton, Parry Sound and Orillia (known as the Lakelands) saw a jump in average prices of 42.2 percent year on year. To call these increases record-breaking would be an understatement. Yet, homes and cottages in these regions are still highly sought after and seem likely to report even higher sales by the end of the summer.
Why the Shift?
The growing demand for rural homes spurred on by the pandemic created two main reasons for families to move to cottage country: the ability to work remotely and the inability to travel. For almost two years, the only way to “play” was to move to the country and combine home and recreation. In effect, the staycation has taken on a whole new, more permanent meaning.
As more companies move to remote work or a hybrid model (part at-home, part in-office), the need to remain in cities is dwindling. Increasing home prices make it impossible for most families to own both a cottage and a residence, so many are choosing to relocate and combine work and play in the great outdoors. Or, they’re becoming priced out of the GTA entirely and choosing rural life instead.
In an interesting turn of events, the first half of 2021 saw millennials make up a growing number of cottage buyers as they escaped the cramped quarters of the city in favour of more space and scenery. The lower rural prices made homeownership affordable for this younger generation, so long as they were willing to relocate. The quandary now is, will it remain affordable as prices soar and inventory remains low through the summer months.
Lower interest rates have also given buyers an incentive, and the confidence, to take the plunge. In the past year of increased cottage sales, more than half are first-time recreational property buyers. Some are making a lifestyle change to rural living. Others are taking advantage of their forced saving during the pandemic and record low borrowing rates to finally achieve their dream of cottage ownership.
What’s the Future for Ontario’s Cottage Country?
While it initially appeared that remote work was temporary in the early days of the pandemic, it seems now to have spawned a new “work-from-anywhere” movement. As this new way to work grabs hold, it’s prompting more families to consider a permanent lifestyle shift. Since the Lakelands cottage region is closer to the GTA, it’s more attractive for buyers who want the escape but are not ready to venture too far north.
The market forecast is for sales to slow somewhat towards the end of 2021 and into the winter months, but recreational property prices are still expected to climb 10 percent in the second half of the year. The concern is, as prices continue to climb, some buyers may soon be priced out of cottage country as well.
As vaccinations increase across Ontario and a new-normal life begins to takes shape, perhaps we will see how the next generation will balance work and living… with more people choosing a professional remote-work life in a scenic, recreational setting.
