How young buyers afford cottage ownership: a temporary rental

Published: September 4, 2020

Close-up of young hand holding keys and wooden house model against blue background Photo by FREEPIK2/Shutterstock

Is cottage real estate becoming a young person’s game? While boomers still account for the majority of cottage sales, Re/Max’s 2019 Recreational Property Trends survey revealed that even Canadian millennials (roughly aged 24 to 39) are interested in buying a recreational property—56 per cent of them are in the market to purchase, up a full 14 per cent from the previous year.

The cottage market is seeing the effects, and prices are rising across Canada. Tofino, B.C., topped the list: waterfront property prices increased by a whopping 80 per cent since 2018, with the average price now at $2.5 million. Collingwood and Blue Mountain, Ont., jumped by 36 per cent. And Prince Edward Island is dominating the Atlantic cottage market, seeing a 15 per cent median price increase.

There is no shortage of media reports about young families struggling to find affordable housing in Canada. So, who are the younger buyers moving into the cottage market? How did they do it? And what did they learn?

In search of: A rental until we can afford to use it ourselves

Matthew Spencer, 30, and Annie Myron, 30

The 3,000 km commute from Calgary to Apsley, Ont., did little to dissuade Matthew Spencer, an associate at CIBC, and his wife, Annie Myron, who works for Alberta Health Services, from purchasing their renovated 1970s Viceroy, with its large, panoramic windows overlooking 130 feet of pristine waterfront on Chandos Lake in North Kawartha.

The young couple bought the cottage for $650,000 in September 2018 but have yet to enjoy it themselves. “We don’t have the finances right now to fully support a vacation home, so it’s a rental property until we’re in a position where we can use it ourselves,” Matthew says.

To save for the purchase, the couple spent two years living lean, limiting discretionary buying and eschewing vacations. They also rented out their condo’s spare bedroom on Airbnb. “Essentially, we lived with a new stranger every night for a year,” Matthew says.

Despite the extreme commute, they were set on buying in the area because Matthew grew up cottaging on the western end of Chandos, where his parents still own property. But real estate prices in Apsley are rapidly appreciating. The cottage had been listed for $355,000 when it was on the market in 2016. “I was worried about getting priced out,” Matthew says. Word of mouth led them to friends on the lake who were willing to sell and offered their cottage to the couple off the market.

The cottage checked two major boxes: it was fully winterized and recently renovated. “I didn’t want to be flying back to fix things,” Matthew says. So far, renting it out is working for them as they slowly pay off their mortgage. And if anything goes awry, Matthew’s parents are only a boat ride away.

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