The region’s cottage real estate market remains hotter than a flaming marshmallow as strong demand but dwindling supply continues to cause the average price of recreational properties to climb in Eastern Ontario and West Quebec.
Top realtors with extensive experience in selling country retreats say the current cottage craze is unprecedented, pandemic influenced and showing no signs of cooling off.
“It started Aug. 1 of last year and continued into this year,” says Scott Burns, owner of Rideau Realty Ltd., a small brokerage that's been in his family for years, located in the village of Portland on Big Rideau Lake. “It hasn’t slowed down at all.”
Over the past decade, the asking prices have been rising steadily in the single-digit percentage range, he said. Until last summer. That’s when COVID-19 caused property prices to really soar. His brokerage deals primarily in and around the Township of Rideau Lakes, up and down the Rideau Lakes system, including the Lanark County area surrounding Smiths Falls and Perth, and down toward Kingston and Athens.
“We started to see 20, 25, 30 per cent increases in value,” says Burns. “It was a jump we’ve never seen before.”
Not only that, but more than 80 per cent of Rideau Realty’s deals now involve multiple offers in what's become an ultra-competitive seller's market, he said.
“We’ve probably had more multiple offers in the last eight months than we’ve had in the last 10 years,” said Burns, who’s been working in the industry for 16 years.
According to a spring report released by real estate company Royal LePage, the price of recreational properties is expected to rise in every province across Canada. It’s forecasting the highest price jump in Ontario and Atlantic Canada, with both set to experience a 17 per cent increase. Quebec will see a 15 per cent price jump, according to the report.
As well, 91 per cent of recreational property experts in the country are reporting lower inventory than typical for respective regions, as demand continues to outpace supply.
The report also found that the younger generation is a very active segment of buyers.
In recent years, the majority of Rideau Realty’s clients have come from the Ottawa region. But COVID-related telecommuting trends have meant more Torontonians are eyeing the Rideau Lakes as a desirable destination for a second home. It's an area that's more affordable than many regions around Toronto, such as the Muskokas.
“A lot of buyers are looking for that alternate property and are saying, ‘Hey, if I can work from home, why not work from the cottage for a week,'” said Burns. "That four-hour drive is not as big of a deal now, because they can stay at the cottage for longer.”
Stephen Lynott is another real estate brokerage owner with deep roots and a rich history in the region in which he does business. He took over Century 21 Macintyre from his late father-in-law and mentor, Frank Macintyre. Its office is in Chelsea, Que., where Lynott also lives. His boutique brokerage in the Gatineau Hills deals with rural properties from Chelsea to Maniwaki and from Buckingham to Shawville.
Before the pandemic, Lynott was already noticing fewer and fewer cottages going up for sale as more owners looked to hold onto their properties, whether as income-generating short-term vacation rentals or remote work destinations.
“I always say, if you have good internet, you can work from Mars.”
When the pandemic hit, he said, “it was like a perfect storm” for buyers.
Century 21 Macintyre had to close its office for two months last spring, after its industry was deemed non-essential. It expected to see “a bit of pent-up demand” once it was allowed to re-open in May 2020, said Lynott.
“But, what we found was that there was extraordinary demand and very little supply.”
Even cottages that’d been languishing on the market for two years were quickly snapped up, said Lynott, who's never seen a market as hot as this one.
“I don’t see it stopping and I don’t see it slowing down, at least for the next year or two. I really see it continuing.”
As much as the situation is frustrating for buyers, the cottages in West Quebec have been undervalued for far too long, said Lynott of the region's close driving proximity to Ottawa and exceptionally clean lake waters. He's now seeing recreational properties sell for more than $150,000 over the asking price and with anywhere from five to 15 offers.
“I still think we’re undervalued, relatively speaking.”
Another option for wanna-be cottagers is to find a piece of paradise to build on or to hold onto until the timing is right.
"My father-in-law used to say, 'They're not making any more waterfront,'" said Lynott of the rising value of land.
It's been a very busy year for award-winning custom home builder Paul McElligott.
“It’s overwhelming, really,” said the president of Casa Verde Construction, which picked up three awards at the 2020 Greater Ottawa Home Builders’ Association (GOHBA) Housing Design Awards. His company has made a name for itself in urban and cottage homes in the niche high-end market.
For the past 10 years, Casa Verde has been part of the development and building of a 500-acre luxury cottage community at Lac Saint Sixte in Quebec, about an hour northeast, between Ottawa and Mont Tremblant. Virtually all the waterfront lots have been sold but there's a growing interest in the wooded lots that offer access to the lakes and to the amenities and activities, such as tennis courts and walking trails, located within the exclusive, gated community.
Casa Verde Construction has also expanded into the luxury ski chalet market at Mont Ste. Marie.
Attitude are changing among cottage owners, who are now taking their second homes more seriously, said McElligott.
“We were always told you don’t buy a cottage property as an investment, that it’s a bad investment, but there’s been a shift and people are now viewing cottage properties as an investment, not just as something recreational."
His wife, Laura McElligott, who handles operations and marketing for Casa Verde Construction, says they're seeing an increase in clients wanting to take the extra leap into building a home or cottage of their own; one that can be enjoyed for generations to come.
“Families are pushing forward and accelerating their plans to build their dream home or dream luxury retreat,” she said.