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The number of permits issued to build cottages in Canada has dwindled to next to nothing this spring, leading to a shortage of supply in some areas.

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The Globe's Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter Tara Perkins. Read more on The Globe's housing page and follow Tara on Twitter @TaraPerkins.

Cottage construction has slowed to a crawl across the country, pushing up prices for something already considered a luxury for many Canadians.

The number of permits issued to build cottages in Canada has dwindled to next to nothing this spring, leading to a shortage of supply in some areas.

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"Anyone wondering why Canadian cottage prices are rising need look no further than the supply side," Bank of Montreal economist Sal Guatieri writes in a new research note.

"Building permits for cottages tallied just 335 units in the past year to June, extending a decades-long slide, as the readily-accessible supply of lakefront property declines," he added. "We are now building about one-tenth as many cottages as in the mid-70s."

The recreational property market tends to be hit especially hard in economic downturns, because the properties are a luxury.

Building permits for cottages plunged when the tech bubble burst in 2000, and have stagnated further since the financial crisis.

Realtors say that cottage sales were slow during the first four months of this year when the weather was colder than usual, but picked up by June. Sales of cottage properties in Ontario's Muskoka-Haliburton-Orillia area were down 18 per cent from a year earlier in April and down 4 per cent in May.

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