Almost every industry has been affected by the economic impact of the COVID-19 pandemic in one way or another. The luxury real estate market is no exception. However cottage country appears to be an exception.
When news of the virus first began to spread, Stephanie Adams’ regular clientele reached out to her because they were concerned for her business. Adams is a sales representative at Harvey Kalles Real Estate Ltd. Brokerage and is an expert in luxury properties in cottage country. She’s also a co-host of the HGTV show, Hot Market.
Big increase in demand
“They warned that when there are financial difficulties, typically the first thing to go is the recreation market and secondary properties,” she said.
However, that hasn’t been the case. In fact, the exact opposite is happening.
“We’re seeing an increase in our sales and an increase in demand,” she explains. “People are happily spending their money on a secondary residence or a residence outside of Toronto.”
We spoke with Adams to learn more about how the luxury real estate market is heating up in cottage country.
How would you describe the current market in cottage country?
“It’s actually on fire! It is so busy – busier than it’s ever been. Inventory is low. Sales are high, and the demand is high. These luxury properties are spending fewer days on the market and are usually selling for asking price. Ultimately, we’re seeing a lot of people wanting to leave the cities.”
What are the demographics of the people buying cottages?
“Our clients are pretty diverse in terms of age and demographics. Some of our clients are families who typically send their kids to camp. Since they can’t send their kids to camp and they might not be able to do so for a while, they want a second home in a similar environment. And it’s not only for this summer, but they recognize its benefits for years to come.
Additionally, people who are also investing in this real estate typically travel abroad during the summer. But they’re starting to recognize that international travelling might not as much happen anymore.”
What impact did the pandemic have in this shift towards cottage investments?
“People want to keep their families safe. Before Toronto began reopening for business (after the initial COVID-19 lockdown), we saw some increased traffic. People were coming up from the city, and the rental market was off the charts. Of course, clients have also been moving from the city during this time to keep their families busy.
Also, there’s a lot more remote workplace flexibility than anyone could have ever been anticipating. So people are investing their money in a lifestyle property and also changing their lifestyle.”
Where are the in-demand areas for these luxury cottages?
“There’s an increased demand in Lake Simcoe and Lake Couchiching. And the Muskoka market is always hot.”
Trends and challenges owning homes in these more secluded areas?
Trend: More multigenerational investments
“People who want to invest in recreational properties are trying to convince their parents to invest together. After all, it’s a big purchase. And families also realize the benefits of having a recreational property that they can share with their parents, inlaws, or siblings.
And since these properties are so big, it’s comfortable enough that you can stay there with your extended family and still have your own space.”
Trend: Increased demand for modern homes
“There’s a significant demand for more modern-styles cottages. A lot of people still think of cottages as a traditional cabin or a rustic-style property. But that’s not the case nowadays. People want contemporary, modern design and architecture.
So when it comes to investing in a second property in the luxury real state market, people view it as their own personal boutique hotel. These properties are similar to self-contained mini resorts. There are pools and typically a spa and a tennis court, plus you’re nearby lakes. It’s a type of place where you won’t get bored.
However, before you purchase these types of luxury properties, remember maintaining these properties is also a responsibility and investment in itself.”
Potential challenge: Maintenance costs
“Just because you’re on a lake, doesn’t mean you can let your landscaping run wild. You also need to maintain and monitor things that you don’t usually think about in the city, like your property’s septic tank or even snow removal. Plus winters are also a lot harsher in these parts of Ontario, and that adds to the maintenance.
It would be best if you also made sure that somebody always has eyes on your property for security reasons. Or even watching out for things like flooding damage.
So many of my clients will fall in love with a big 16-acre property. But you need to keep in mind that it also comes with a 16-acre property maintenance price tag!”