“One buyer wanted 25 percent off”: Are city slickers scooping up property in cottage country? We asked a realtor
These days, owning a slice of property in cottage country is an attractive proposition. The pandemic has made us wary of densely populated spaces, meaning square footage outside of the city is at a premium. Plus, with international travel disallowed, frustrated snowbirds and globe-trotters will gladly settle for weekend jaunts to their lakeside retreats. But are Torontonians actually buying property in cottage country right now? We asked Greg McInnis, a realtor with ten years of experience selling in Haliburton.
When the pandemic hit, how did it impact people who were planning to sell their property in cottage country?
I know a few sellers who, back in January, were planning on listing this spring. They wanted to list the properties after advertising them at the Cottage Life Show, a major annual trade show held at the International Centre in Mississauga. The event features things like boats, cottage furniture and property listings. It also normally kicks off cottage season for our brokerage. After it got canceled, many of the potential sellers decided they don’t want people in their houses. One client even kept a property he was planning to sell, because he wanted to self-isolate there until the end of the pandemic. Overall, people aren’t wanting to sell their cottages. So, inventory is very low.
How does that affect the market?
In 2019, to date, there were 105 sales of waterfront properties in Haliburton. This year, that number is 67. So, we’re looking at about a 64 percent decrease in sales since last year. However, the average sale price of a waterfront property in Haliburton at this time last year was $578,000. And this year, it’s $682,000, which is up 18 percent. That’s driven by the fact that we have more demand than supply—a lot of people in the city want to be up here, while a lot of older sellers who may have previously wanted to give up their cottage to free up travel funds have changed their plans. Not saying that they won’t want to sell in the future, but they may have put those plans on hold for another three to five years to see how this pans out.
Have any of your clients bought specifically because of Covid-19?
Yes, a young couple from Markham. Both of them work from home so they could really be living anywhere. They felt cooped up and wanted to be somewhere they could get some fresh air, because their place didn’t have a lot of outdoor space. That motivated them to start looking for a cottage. They found something on a small lake with good privacy, which was especially important to them right now. I guess they didn’t want to be close to people, and I can’t really blame them for that. They just had a new baby as well. I’m not sure if that had anything to do with it, but I imagine they wanted to keep everyone as safe as possible and spend their summer here, versus the city where there’s such a dense population.
And what about other buyers?
Overall, I have seen a lot of new buyers, and one of the driving forces is being able to get out of the city, especially given that people are perhaps not planning to travel as much. We’re seeing people heading into retirement, or looking towards retirement, and the original plan was to do more traveling. But now they’re thinking, In the short-term, we’re not going to be doing the traveling we wanted to do, so let’s get a cottage instead. And that way we’ll have a place to enjoy while all this is going on.
How are people reacting to the changes in the market?
Some buyers understand that because so many people are also looking for cottages, prices are up. They’ll pay because they just want to get out of the city. Others think the pandemic has crushed the market, so they try to get a deal. I had one buyer contact me thinking they could get something 25 per cent lower than normal, and they were quite shocked when they found out that prices have increased.
What do people in cottage country think about city folk buying places right now?
I think, overall, people are okay with it. The main concern is health. Our local healthcare system doesn’t have a lot of capacity for handling people with the disease. There aren’t many respirators and that sort of stuff up here. However, local residents do know that people who own property in this area and live in the city are paying taxes, and should be able to use their property. I guess the constant driving back and forth is more of a concern. If someone is coming up here, staying here and self-isolating, that’s not a problem. Obviously, there are some vocal critics that want people to stay at home. But many realize that we’re moving into the summer season here, and people want to be able to use their properties and they want to be able to purchase.
Why might this not be the best time to buy a cottage property?
There’s absolutely a risk that, if we head into a recession after this is all over, there will be a short term decrease in value. But I advise buyers that when you look at buying something, even if the market goes down, it goes back up again. And it always increases over time. So as long as you can stick it out during a potential downturn, then it’s not an unsafe bet. And it’s not just a commodity—you can get enjoyment out of it in the meantime.
What sort of long-term impact do you think the pandemic will have?
It seems that the pandemic is driving people to the area. Again, people don’t want to be in densely populated areas. I think there will be more people who were thinking about retiring or semi-retiring, and driving back and forth to the city, who will want to make a full-time move to cottage country. Obviously, cottages are considered non-essential—not everyone needs a second house—and that could negatively impact the market in a recession. But on the other hand, you may have people wanting to sell their Toronto place and moving up here, because their plans for international travel have changed, and they’ll want to spend their retirement years up here.