Winnipeg Free Press - PRINT EDITION

Bullish cottage report countered

Realtor disputes paper citing market recovery

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All observers agree there is good value to be found amid price inconsistencies in the province's cottage market.

JOE BRYSKA / WINNIPEG FREE PRESS ARCHIVES Enlarge Image

All observers agree there is good value to be found amid price inconsistencies in the province's cottage market. Photo Store

A report boasting that cottage markets were gaining stability and demand was gaining traction was disputed by local real estate agents -- including one longtime Lake Winnipeg area agent who called the report "absolute nonsense."

The report, issued by Re/Max of Western Canada, said pent-up demand following recent years of severe flooding has led to "a serious upswing in recreational-property sales throughout key areas of the province so far this year. Strong demand, coupled with a good selection of product, has provided a major boost to cottage sales, especially in areas such as Lake Winnipeg, the Winnipeg River System, Lac du Bonnet, Whiteshell Provincial Park and smaller lakes south of Brandon."

The report added: "The greatest demand exists for recreational product on Lake Winnipeg, including Winnipeg Beach, Gimli and points north on the west side, as well as Grand Beach and Victoria Beach on the eastern shore of the lake."

However, Larry Guarino, of Grand Beach Realty, took issue with the Re/Max findings -- at least when it came to the east side of Lake Winnipeg.

"I don't know where they're getting their information from," said Guarino who, along with his father, Chuck, has sold real estate along the east side of Lake Winnipeg for over 40 years. "It's a buyer's market right now. I've never seen so many listings. People are sitting on their hands."

Guarino said the tightening of mortgage conditions, the possibility of interest rate increases and increased property taxes have brought a chill to the cottage market, which peaked in the mid- to late 2000s with the boom in Winnipeg real estate prices.

"Everything peaked in 2007-08," Guarino said. "After that, the graph has been going downhill. People are paying down debt right now."

Guarino cited a cottage recently sold at Victoria Beach (restricted area) for $225,000 despite having an assessed value from the municipality of $321,000.

Indeed, even the Re/Max report showed the starting price for a cottage in Lake Winnipeg, listed at $300,000 in 2009, was $250,000 last year and this year.

However, a local appraiser noted while some markets might be depressed, others, such as Falcon Lake and the Whiteshell/Lac du Bonnet region are not. "We haven't seen decreases, that's for sure," said Gordon Daman, past president of the Manitoba Association of the Appraisal Institute of Canada.

"The increases haven't been 15 to 20 per cent per annum," Daman added. "There's still good markets out there, just not the same level of increase."

Al Shrupka, of Re/Max Associates, conceded the recreational real estate market around Lake Winnipeg and Lake Manitoba was dramatically affected by severe flooding in recent years, which "not only affected prices, to a very large degree it affected demand."

Shurpka said the Re/Max report includes the entire provincial market, including Riding Mountain, where values remain solid, and southwestern Manitoba, in the Turtle Mountain region. "There's a lot of oil revenue flooding into southwest Manitoba," he said.

"It's rebounding from a very, very soft marketplace to a very buoyant marketplace, pardon the pun," Shrupka added, of the overall provincial cottage property values.

Both Guarino and Shrupka agree on one thing: There are bargains to be found given the inconsistency in the marketplace. "There's good value out there," Shrupka said. Added Guarino: "There's a lot of people desperate to sell."

Shanna Karle from Ateah Realty reported that between Jan. 1 and July 1 of 2012, in the east beaches area 94 cottages (14 waterfront) were sold, with prices ranging from $115,000 for a vacant lot to $450,000. From July 1 to June 25, 69 cottages were sold (10 lakefront).

"It does appear that we are down a little bit from last year but with the weather (cold spring), I am not surprised by that," Karle said. "Prices dropped in the last couple of years, we did have a market drop over the last probably three years. That kind of peaked probably late 2009, early 2010. It has been dropping ever so slightly every year.

"This spring, even though it was cold, we started out right on schedule and we've taken more offers at full price or close to list price this year than I've seen in the last four years certainly. When that happens, it starts bringing those values back up again.

"(But) We don't have multiple offers, it's not like the City of Winnipeg where you get a lot of multiple offers."

randy.turner@freepress.mb.ca ashley.prest@freepress.mb.ca

Republished from the Winnipeg Free Press print edition June 26, 2013 A6

History

Updated on Wednesday, June 26, 2013 at 7:52 AM CDT: replaces photo, adds sidebar

June 27, 2013 at 8:00 AM: corrects that cottage sale statistics are for the east beaches area, not just those of Ateah Realty.

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