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This spring was a tough time to sell cottages and recreational properties in much of Canada, as the unusually cold weather kept buyers away.
“It was a slow start this year,” says Steven Curry, a realtor in Ontario’s Muskoka region. “We had a ridiculously long winter that just didn’t want to let go. When there’s snow on the ground in Toronto, nobody’s calling real estate agents up here and saying ‘let’s go look for properties.’ And there was a lot of damage done because of the snow, it took a while for the roads to open up.”
The number of cottage properties that sold in the Muskoka Haliburton Orillia area during April was down 18 per cent from a year earlier, while prices barely budged.
The persistent winter caused Royal LePage to postpone its annual report about the state of the Canadian recreational property market, which will be released Thursday.
“We actually delayed our recreational property report by two weeks because the market was so delayed that the data just wasn’t available,” says Royal LePage president Phil Soper. “That’s the first time we’ve seen that in memory.”
Prices of recreational properties rose rapidly from 2002 to 2007 – indeed, faster than home prices, Mr. Soper notes. But when the recession hit, the recreational property market took more of a dent than the broader residential market did.
“If you look at unit sales in 2008, 2009 in places like Muskoka, they were half of what they were prior to the recession,” Mr. Soper says.
Sellers accepted lower prices to unload their properties, and prices in the cottage market really didn’t recover until last year.
“They reached the 2007 levels in 2013,” Mr. Soper says. “This year we haven’t seen enough activity to see an uptick in prices. My expectation is they’ll be up in the low single-digits, they’ll be just slightly above inflation but no hard uptick.”
Mike Stahls, president of the Lakelands association of realtors in the Muskoka area, says that the average selling price for properties on the waterfront has increased.
But averages can be distorted, and local realtors say they aren’t seeing prices rise.
“Prices are down,” Mr. Curry says. “We have not seen any increases in prices as far as I’m concerned. Prices are probably down around 2004 levels. But people with deep pockets, if it’s exactly what they want, they’ll pay a little bit more.”
“There is quite a bit of product on the market,” he adds. “I did a search the other day and there were about 45 (properties) listed for over $3-million. That’s a lot.”
Listings at the more affordable end of the market are also up, he says.