Cottage prices projected to slide

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This article was published 13/08/2018 (2586 days ago), so information in it may no longer be current.

Despite Canadians flocking to lakes and streams for summer getaways, cottage prices are expected to see a slight dip in Manitoba, with one notable exception.

Against the backdrop of a strong forecasted national recreational property market — with most provinces expected to experience significant price increases — Manitoba is an outlier, with a projected decline in average cottage price.

Year-over-year prices in Manitoba are expected to drop 0.9 per cent in 2018, to $230,833, according to a cross-Canada survey of recreational property specialists produced by Royal LePage.

In Lac du Bonnet, for example, waterfront property prices are expected to dip 2.5 per cent this year, while non-waterfront property prices are projected to decrease by 9.1 per cent.

Around Lake Winnipeg, however, it’s a different story.

Waterfront properties at Lake Winnipeg, which has a number of popular destinations, are expected to go up 10 per cent in average price point over 2017.

Managing broker of Interlake Real Estate, Chris Neufeld, said while recreational properties that have already sold in the area may have jumped in average price, he feels it’s still a buyer’s market.

“From our standpoint, we feel we have a lot of properties available. We think it’s a buyer’s market. That 10 per cent increase would only reflect properties sold. If anything, we think there are more frustrated sellers because there are more properties on the market,” he said.

Neufeld said more cottages and recreational properties remain on the market for a couple of reasons: sellers are too optimistic about their pricing and changing demographics means fewer people are interested in owning a cottage.

“More people are getting away from cottage life than getting into it,” Neufeld said.

“As a result, we have more listings. Baby boomers are getting into their 60s and 70s. The cottage life doesn’t fit their lifestyle anymore. I think that’s a big factor.

“There are still people that enjoy being out at the lake, especially if you’re talking about areas within an hour of Winnipeg.

“But many young people are either not interested — or not able to afford — the cottage lifestyle.”

Neufeld’s observations are consistent with Royal LePage’s cross-Canada survey.

The recreational property specialists interviewed for the report said upticks in demand and sales weren’t likely to translate into a decrease in supply, given a rise in inventory over the past year.

“Despite a strong economy and low unemployment rate, prices across (Manitoba’s) recreational property market will likely stay flat this year, as a result of new mortgage regulations having impacted purchasing power,” Royal LePage Prime Real Estate managing partner Michael Froese said in a written statement.

“Even though Manitoba is home to some of the most affordable recreational properties in the country, and has a number of unique programs encouraging secondary homeownership, the new stress test may make many purchasers think twice about taking on additional debt, limiting the great potential found within the market this year.”

ryan.thorpe@freepress.mb.caTwitter: @rk_thorpe