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Maintenance costs and property taxes on a cottage can easily rival those of a million-dollar home in Toronto.Chestnut Park Real Estate Ltd.

We have a lot to learn about what pandemics do to our judgement in matters of spending money.

Back in March and April, it looked like we might be entering an age of frugality and saving that would recall behaviour influenced by the Great Depression. The frantic goings-on in the housing market suggest that some of us aren’t wired for that. The pandemic may actually be prompting many to spend.

Urban housing markets across the country had a great June, and sales of rural second homes in some provinces have popped as well. The pandemic seems to have increased the sense of exhaustion some people feel about city living. With remote work an option, they’re looking at life in the country.

Veteran Toronto real estate broker Farrell Macdonald wonders if buyers in cottage country are making decisions they will regret later for reasons related to both lifestyle and finances. “I find that whenever things get a little frenzied and impulsive, people don’t take the chance to think it through and look at it from all the different angles,” he said.

A popular story on The Globe and Mail website this week documented how some Toronto-area residents are deciding to move out of the city to smaller communities, some of them in rural areas. But this isn’t just a Toronto thing. Global News recently reported a big increase in cabin sales in Manitoba, with one agent saying she’s having the busiest summer in a decade.

What you need to know about managing your finances during the pandemic

Mr. Macdonald has some thoughts on buying that are worth considering even if you’re not keen to move away from the city. They’re a model of applying rational thinking to purchases you feel emotionally compelled to make at a time of high anxiety.

Let’s start with living costs – they’re not always cheaper in a rural location. Mr. Macdonald warned that the property taxes on a $500,000 cottage can easily rival that of a million-dollar home in Toronto.

The freedom to work remotely rather than in office is driving a lot of interest in rural living, but Mr. Macdonald said some locations don’t offer access to high-speed Internet. Another issue is the level of services available if you stay on when summer ends – are roads plowed in winter and are all the household necessities and health care you need close at hand?

“The overall quality of life is beautiful in summer – it’s quiet and everyone’s outside and taking it all in,” he said. “In winter, a lot of the permanent residents of cottage country fly south because it can be really isolating.”

In Mr. Macdonald’s experience, cottage ownership can be a challenge even for fair-weather use. Extensive maintenance and upkeep can be required. Renovations may be constrained by local rules about changing the building’s footprint or altering waterfront property. Children who start out loving the cottage can lose interest.

Growing interest in rural properties means multiple offers are no longer an infrequent event outside of prime waterfront locations. “I’ve had one or two calls from colleagues [in cottage country] who aren’t used to dealing with multiple offers,” Mr. Macdonald said. “They wanted to bend my ear and say, ‘How does this usually go in Toronto, the land of bidding wars?‘”

Still, it would be a mistake to bank on vacation properties going up in value like urban homes have in recent years. Mr. Macdonald said factors such as weather can affect demand for cottages as much as the usual interplay of supply and demand. So could a COVID-19 vaccine that allows people to return to their offices and city lives without the burden of physical distancing.

“When you go to sell a cottage, we may not be in the same hot-to-trot market we are now,” he said. “There may not be a frenzy to snap it up.”

To make a sensible decision about buying a cottage, Mr. Macdonald suggests talking to family members to gauge their interest and planning to own for the long term. Don’t let your judgement about big purchases be swayed by short-term factors like the pandemic.

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