For many real estate markets in Ontario, the outlook for the year appears brighter than the last. According to the Canadian Real Estate Association, Ontario home sales were up month-over-month by 23.1% in January as buyer interest seems to be renewing. But has this enthusiasm extended up to Ontario’s cottage country as well? We talked with local eXp real estate agent Karen Hanes to better understand current market conditions in cottage country.
“I am seeing buyers out now with a sense of confidence that conditions are going to improve,” says Hanes. “Even though home sales have been lower during the winter months, there’s still a high demand and continued desire for people to own a second property in one of the most beautiful areas in Ontario. Early spring activity is hinting at increased demand from buyers.”
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The Charm of Cottage Ownership as an Investment
In eight out of eleven cottage country markets we analyzed, the benchmark price of a home went up by more than 40% in just six years. Bracebridge experienced the greatest percentage gains from January 2019 to January 2024 with the benchmark price rising by 64.1% to $578,800 according to the Lakelands Association of Realtors®.
“Waterfront properties have a high demand from city dwellers and that demand continuously pushes prices up over time, regardless of market fluctuations,” explains Hanes. “Waterfront cottage values are bound to rise due to them being quite limited in a sense. With few being built, what’s available is all there is, making them a solid investment for a family.”
The Blue Mountains, Orillia, Huntsville, and Kawartha Lakes all experienced price growth of more than 50% in the last six years. But despite this price growth, buyers can find favorable deals in the market now. Recently, a lot of sellers who bought at the height of the pandemic are now looking to let go of their purchases, which is helping to prop up supply and is giving buyers a chance to negotiate for better prices too.
“Fractional ownership is another option for potential buyers. With fractional ownership, you get a certain amount of weeks of use to it but you are a co-owner so you’re still building equity,” shares Hanes. “This might be a good entry point into cottage country for first-time buyers.”
In terms of dollar amount, Muskoka Lakes homes experienced the greatest price appreciation in the last six years. The benchmark price in Muskoka Lakes rose from $900,800 in 2019 to $1,305,000 in 2024.
Hanes, who is part of eXp’s luxury division, says that the luxury market has been less impacted by fluctuating interest rates. “Interest rates shape affordability for many waterfront and non-waterfront properties, but for luxury real estate, the landscape is quite different and more resilient,” says Hanes. “The foreign homebuyer ban doesn’t apply to Muskoka so our global marketing services allow us to expose luxury properties to international buyers, which also helps keep the market strong.”
Advice for Buyers Looking in Cottage Country
If you’re new to owning a second property, especially a cottage, then it’s essential to understand your needs and what cottage ownership really entails. Consider your goals – whether that’s boating, beaching, weekend escapes, summer-long stays, or turning it into an Airbnb, all of these factors will influence what the ideal cottage looks like for you.
“Also, double-check those Google map distances, things are often further than they seem. We have all of the amenities that you’d find in a city, but navigating our area requires a bit more time for travel,” says Hanes.
And if your goal is to own a waterfront property, then there are a few extra elements you’ll need to consider. “Do you need a boathouse or a deck? Is the lake susceptible to green algae? Is the land weedy? How much are waterfront taxes? There are many questions to ask when choosing a waterfront property. Working with a knowledgeable real estate agent, who will do the due diligence to ensure the property meets your expectations, is the best strategy for finding a place that truly delivers,” says Hanes.
If you’re considering investing in cottage country this spring, let us help! Contact us today to speak with a trusted realtor about the home-buying or selling process.
