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A cottage in Muskoka on May 19, 2017.Mark Blinch/The Globe and Mail

Muskoka realtor John Fincham has a piece of advice you’d never expect to hear from an agent: Now is not the time to buy a cottage.

That’s particularly surprising when you consider that cottage prices have tumbled rapidly across Ontario. In the first three months of the year, listing prices experienced a dramatic drop of 31 per cent year-over-year in Peterborough and the Kawarthas region, from an average of $1.2-million to roughly $855,000. In Haliburton, prices were down 26 per cent in the same period, while the highly desirable Muskoka region was down 14 per cent.

Prices have only just started recovering, with areas like Muskoka gaining back 10 per cent on average in the third quarter of 2023, but realtors generally believe more losses are likely to come.

Agents in areas such as Muskoka and Haliburton also say listing prices can sometimes be a volatile statistic; anecdotally, they have seen property values drop about 15 to 20 per cent from pandemic highs.

Mr. Fincham says interest rates and the migration back to cities will lead to even more deterioration in the market of cottages priced under $3-million, which is seeing weakness after years of meteoric growth.

“I’ve had five calls today from people who have to get rid of their cottages because they can’t afford them – because they bought them either on variable mortgages or a line of credit,” Mr. Fincham said in an interview earlier in the fall.

Realtors say people who find themselves in the position of being able to buy a cottage today are faced with two distinct choices: Buy now to snatch your dream home amid a period of relatively low prices and little competition, or wait a little longer to see if the crash in cottage country will hit even harder. The answer depends on who you ask.

Mr. Fincham strongly believes consumers should wait until next spring, even though spring is typically a competitive season when prices rise. He expects pressures on affordability and interest rates to upend the usually busy market.

Steve Keshen, the managing broker of Royal LePage Lakes of Muskoka Realty, also believes cottage prices have further to fall, but in his opinion price drops will not be as dramatic. He says buyers have the best opportunity right now, since prices are low and there is very little competition – especially compared with the past decade.

“Where I think there’s an advantage is for anyone who lost out during the COVID years, when there were multiple offers and hardly any inventory at all. Now’s a great opportunity for them,” Mr. Keshen said. “Because if you’re buying for the long haul, even if prices fell back another 5 per cent, you have selection of inventory.”

Selection is key because a cottage is a much more complicated property than a city home. There are factors such as wind exposure, potential problems around road access and even variables such as shoreline issues – the depth and clarity of the water, for instance.

“Now you have buyers who are saying, ‘Hey, I can be more selective and tick off more boxes,’” Mr. Keshen said.

There are also some differences between the current cottage market and those of years past, when cottage prices generally moved more sharply during volatile housing markets, Mr. Keshen said.

For one, people today can seriously consider selling their primary residence in the city and live and work at their cottage, something that is only possible because of the ubiquity of remote work.

That’s partly why 64-year-old Peter Catsburg thinks high-quality cottages are still hard to snag. He notes that many people who own pristine properties seem to be doing everything they can to not put them on the market, while the ones that do hit the market are fought over by multiple buyers.

He has been shopping since midsummer for a year-round home in the Haliburton area, where he would move to from Toronto and work remotely before eventually retiring.

He has seen deals on homes that have been on the market for a long time, but he’s noticed that the really good homes – the ones with clearly high build quality, on lots that don’t have potential weather-related issues – often attract multiple bids and sell quickly.

“I can really see from the homes we’ve looked at that a certain kind of well-maintained home still really holds its value,” Mr. Catsburg said.

That’s why he’d rather try to get lucky and find the perfect home now rather than attempt to time the market and risk finding himself in an environment where buyers quickly start piling in again.

“What I do see when we look at houses is there are many people that are also saying, ‘Hey, we can afford a cottage again.’”

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