Cottage market shows record sales caused by low mortgage rates and remote work possibilities
The current pandemic is causing a change in home buyer motivation, leading to a stronger demand for rural and cottage housing.
Although provincial migration has been growing, particularly in Toronto where affordability has been affected during the previous several years, the switch to remote work and new social attitudes caused by COVID-19 have changed this tendency recently.
“In 2020, we can see a different buyers’ motivation,” – noted real estate expert Odeen Eccleston.
“The pandemic has led to additional motivation for those who live in expensive and densely populated regions to move further away from the busy city, as they they’ve been given the possibility to spend less time commuting and more time with their family.”
The latest report by Royal LePage shows that the average home price in Ontario’s Muskoka cottage region was up by 15% annually during the period from January 1 to May 31, 2020.
According to local realtors, the sales are reaching record levels with 278 cottage properties sold in June. It’s 73% more than a year earlier. Moreover, there is a significant increase in demand from city dwellers.
“The pandemic has made a lot of people re-examine their real estate,” – Eccleston said. “As a result, the market has changed probably forever both in Canada and in the world.”
In her opinion, as more employers switch to remote work, more city dwellers are expected to move.
“It allows them to live where they want, and many prefer waterfront cabins, cottages, or chalets,” – she added.
Lower mortgage rates are pushing home buyer demand in such regions, thus driving prices higher.
In addition to it, lower rates lead to stronger consumer confidence, and with higher demand and lower supply, housing prices tend to go up. It’s exactly what’s happening now to Canada’s cottage market.