Real Estate

The five trends shaping the 2017 cottage real estate market

Dock Photo by Brian Lasenby / Shutterstock

This article was originally published in the Spring 2017 issue of Cottage Life magazine.

People own cottages to escape the city, but what if the city won’t let them escape? That’s how things felt for Tammy and David Aspinall. Living in Toronto during the early years of their marriage, they sometimes talked about getting a second property for themselves and their young twins. As a kid, David had spent lots of time at a family cottage on Georgian Bay, Ont., and hoped to give his own children the same experience. But like many two-income couples—Tammy works in the oil industry, David in IT—they found themselves tied down by the routines of big-city life: the hectic commutes, the daycare drop-offs and pickups, the demands of work. What’s more, whenever they visited friends’ cottages, they were staggered by how hard it was just to get out of the urban maelstrom. “We hated leaving the city because of the traffic,” says Tammy. On most weekends, they’d beat the traffic by staying in town: hire a sitter for Friday date nights, followed by Saturdays in city parks. Still, like more and more families across the country, the Aspinalls were asking: how do we get away?

Trend 1: Escape the hectic city

In 2013, the Aspinalls found the answer. They’d recently moved to Calgary, another gridlocked city. But on a weekend ski trip that first winter, they stopped for gas in Canmore. “I stepped out of the car and just went, ‘Wow,’ ” Tammy says. “It was so beautiful, with the main street in the valley, and the mountains on both sides. I thought, This is where we should be.” So they purchased a four-season recreational property there. It’s a detached cabin in a condo development, not the kind of waterfront cottage experience David had as a kid, but one that allows for year-round active living.

Once they finally had a cottage, they still had to reorganize their city routines to beat the rush. “We still have a date night on Fridays, but we tell the sitter to keep the kids up,” says Tammy. When they’re done dinner, they make a late night drive up to Canmore, and the twins sleep in the car. They wake up the next morning amid natural splendour, far from the rat race. “We are adamant about going every weekend,” she says. “Everything is better at the cottage.”

Trend 2: Strong sales and prices rising

The Aspinalls are hardly alone in their decision to restructure their big-city routines. Canada’s densifying urban centres have grown increasingly hectic
and crowded in recent years, which is only making buyers more determined to escape. The result, according to realtors in regions across Canada, is a resurgence of the cottage and cabin real estate markets. After many years of quiet markets, cottage sales are gaining steam. That’s certainly the case in Canmore. The low price of oil has had an adverse impact on Alberta’s lakeside cabin communities, leading to stagnant markets in places such as Sylvan, Pigeon, and Wabamun Lakes. Canmore, however, is the province’s outlier: sales were up 15 per cent last year, and the average price is holding steady at just above $660,000.

“Given the decline in the price of oil, we all expected prices to decline here as well,” says real estate agent Jessica Stoner, an 18-year veteran of the Canmore market. “But Canmore simply isn’t tied to oil prices anymore.” She points to a number of factors, including the strong tourism economy in the town and its status as a magnet for high-performance athletes, including downhill racers, Nordic skiers, and cyclists. “We see lots of young athletes’ parents decide to buy a place for their kid and then rent out a couple of rooms to their teammates.”

But the biggest factor influencing the Canmore market, says Stoner, is the lack of inventory. Thanks to last year’s strong sales figures, she expects the 2017 market to be short on listings and high on prices. “We are surrounded by parks and mountain ranges, so there are natural limits to how much more we can build,” she says. And if supply can’t match demand, prices can only go up.

The Canmore supply problem is being mirrored in other cottage and cabin markets across Canada. Greg Ball, an agent with Bowes & Cocks Realtors in Lakefield, Ont., says he’s witnessed the same shift across Ontario’s Kawartha region, northeast of Toronto, in the span of a mere 18 months. “I went into the fall of 2015 with my usual inventory of about 75 off-season listings,” says Ball. Typically, those listings are his harder sells: fixer-uppers, challenging locations, or owners who just won’t sell below their asking price. “That fall my inventory got pretty much cleared out. Most of those tougher sells finally found their buyers.”

His inventory has yet to recover. Ball started 2016 with fewer listings than usual, so he had a brisk spring and summer market. “All through last year, if I listed a nice little gem at $400,000, it got snapped up right away,” he recalls. And while prices didn’t go up markedly, Ball says that’s the only way they can go in 2017, because his inventory is still low, and he’s looking at more buyers than sellers. “Price increases are the only way inventory will open up, to convince more owners that it’s time to sell,” he says.

Trend 3: Downsize the city home

Back in 2011, Nicole Gallucci found herself standing at a crossroads in her life. A divorced single mom, Nicole, 51, had a great job in downtown Toronto as a partner and senior vice-president at Fuse Marketing. Her three kids were becoming independent, with only the youngest still in high school. They sometimes had apartments with roommates, and other times would move back home for a few months. As a result, her large home in a northeast Toronto suburb was starting to feel empty. “It has a giant pool in the backyard, but no one’s in it anymore,” she recalled. She was commuting two hours a day to work, from a house that no longer made sense as a home.

“As a family, we had decided long ago that owning a cottage was a dream,” says Nicole. “I decided it was time to act on that dream.” She hatched a plan to trade one home for two: she’d sell her suburban place, buy a smaller urban pied-à-terre closer to the office, and finally get a cottage of her own.

For Nicole, finding the cottage was the first step. What followed was a three year search, always accompanied by her youngest son, for the perfect place. They wanted a four-season cottage they could use year-round. And it had to be on the water. “Whenever we visited a place, we’d go straight to the water,” she says. “Anything about a cottage that you don’t like, you can change. But you can’t change the water.” Nicole figures they saw well over 100 properties, and they crossed most of them off their list before ever setting foot inside the building itself, simply because of shallow, muddy, or reedy waterfronts.

They found what they were looking for on West Twin Lake, a two-hour drive northeast from downtown Toronto. The water was pristine and deep, and the setting offered sunrise and sunset views. Nicole bought it for $395,000 last April. And then, after such a long search for a cottage, she completely restructured her city life in about eight weeks. She sold her house and found a smaller semi-detached place much closer to downtown. “We had two trucks at the house on moving day,” she recalls. One took half their stuff to the cottage; one took the rest of it to the commuter home. “We are still city people, but it’s the cottage that really feels like home now,” Nicole says. “You feel off-the-beaten-path when you are up there.” Instead of making a two-hour commute every day, she does it twice a week: every Friday to get out of town, and every Monday to come back in.

Trend 4: Four-season cottages

Another factor played into Nicole Gallucci’s decision to buy a cottage: retirement. At 51, she’s not there yet—but she isn’t planning to work until age 65 either, and she had begun to think about the lifestyle she’d want once her work was done. Now that she has a cottage, she’ll spend more and more of her time there as she dials down her workload in the years ahead. In a way, that process has already begun: “I don’t do Friday afternoon meetings at work anymore.”

Nicole is emblematic of another trend: soon-to-be retirees who are downsizing their city property and buying their future countryside retirement home. In Toronto and Vancouver, where homes have been fetching record prices, some can’t resist the urge to cash out early. “Last year’s market was the strongest I’ve seen in many years,” says broker Anthony Bastiaanssen of Re/Max Kelowna-Westside. According to Bastiaanssen, his region of the B.C. interior experienced a record-breaking year for sales, driven largely by a Vancouver exodus. “Property values in the Lower Mainland have gone crazy,” he says. “More and more people are cashing out and moving to the Okanagan.” As Bastiaanssen points out, that’s a typical retirement transition for this region, “but what we are seeing now is people making that move a few years ahead of retirement.” And they are rearranging their professional lives to make it work, telecommuting whenever possible and car commuting when they must. They are trading places, cashing out of a whitehot urban market and buying into a more affordable, bucolic, and spacious one.

The same dynamics are at play in the cottage market on B.C.’s coast, with sales up 20 per cent in some areas. “The Gulf Islands had a strong market a decade ago,” says Janet Moore of Royal LePage in Ladysmith, B.C. “We were hit hard by the recession of 2008 and never really recovered. Now, as people sell their Lower Mainland homes, our market is rebounding.” And because more buyers across the country are on the lookout for retirement homes, it means they’re searching for all-season properties—and searching for them in all four seasons. New data from the Ontario Real Estate Association show that 78 per cent of realtors see an increasing trend in demand for four-season properties, and two-thirds of realtors say that more buyers are actively looking in the fall.

Trend 5: Own a vacation, not a cottage

With cottage sale prices rising, the question becomes: is this the end of affordable cottaging? The $50,000 cabin is now a rarity, but buyers have long found ways around rising costs. Many team up with family or friends for their purchase. More recently, some purchase a cottage and rent it out to offset their costs, keeping only a few weeks of the year to enjoy it for themselves. Still others, however, are looking for ways to own only three weeks’ worth of a cottage.

According to the Canadian Vacation Ownership Association, time-share sales have been on the rise in recent years, the result of the industry’s efforts to change their product’s image and its offerings. “Time-shares have changed,” says CVOA president Jon Zwickel. “Today’s buyers typically have the option to rent their allotments or exchange them with buyers at other locations around the world.” Time-share units are less like traditional cottages and more like resorts, but they serve the same purpose: getting people out of the city and into more pastoral surroundings. As Zwickel puts it, “The best resort amenities are those created by Mother Nature, not the developer.”

But time-shares ultimately sell only time; the units themselves remain the developer’s property. Hence the continued interest in fractional ownership, where buyers can purchase a partial share of a vacation property. “Our typical buyer is the same recreational real estate buyer as anywhere else, but with more cost-consciousness,” says Randy Trapp, the vice-president of Sunrise Ridge Waterfront Resort in Parksville, B.C., a collection of 42 condo units overlooking the Georgia Strait from Vancouver Island’s eastern shore. “Most of our buyers don’t want to spend $400,000 for a property they’ll only use a few weeks of the year.” A one-eighth interest in a Sunrise Ridge unit costs about $49,000 and gives buyers access to their unit for six or seven weeks every year, with on-site property managers handling maintenance, cleaning, and rentals for unused weeks. Owners can also sell their interest in the property at any time, independent of the other owners.

“I don’t know who the other owners of my unit are, and I don’t care,” says Dave Halstead, a Vancouver-area software sales executive who was among the first to buy a one-eighth share in a Sunrise Ridge unit 10 years ago. “The agreement is that when I show up and walk in, my unit is in perfect shape.” For Dave, the appeal of fractional ownership is that it allows him to connect to his roots. “My family has a long history of living on Vancouver Island, and this makes it possible for me to continue that.”

Fractional ownership also has its challenges. Banks currently won’t extend mortgages for fractional ownership: people typically buy with their savings, a homeowner line of credit, or other bank loans. With so many people sharing ownership, fractional owners can’t always decorate to their liking or keep valuable or sentimental items there. And because fractionals are typically part of larger developments, they are a form of high density cottaging—which isn’t for everyone. Even so, at Sunrise Ridge, the fractional ownership model has proven successful enough that it will expand by an additional 64 units, with construction slated to begin this spring. There’s more than one way to split a cottage.

Philip Preville won a National Magazine Award for the turtle-rescue story “It’s a Hard Knock Life,” in the May ’15 issue.

Looking for more DIY inspiration? Check out our special Get-ready Guide in the Spring 2017 issue—on newsstands now!