The convenient one-hour drive to its beaches is probably the reason Lake Winnipeg cottage country remains one of the most attractive summer get-aways for young families and retirees. Other more distant Canadian recreational areas are losing some of their lustre to cottage owners, according to a new Royal LePage report.
The 2008 Royal LePage Recreational Property Report, found that the lure of the great outdoors and promise of rest and relaxation continue to trump rising gas prices, increased traffic congestion and a changing real estate climate, as the number of Canadian cottage owners has remained steady over the past three years, at nine per cent. However, reason and a need to mind the bank account is likely to outweigh passion this summer, as 19 per cent of cottage owners said they would consider selling their properties if gas prices continue to rise, an increase of seven per cent since last summer.
The poll also revealed that 33 per cent of recreational property owners said that rising gas prices would impact the number of trips they take to the cottage this summer.
On the flip side, local cottage rentals could see a spike in activity this summer, as rising fuel prices keep some families from flying to their summer vacation destinations.
Besides being only an hour away from the big city, Lake Winnipeg recreational properties are considered attractive because they are close to necessary services, including hospitals and grocery stores.
Lake Winnipeg recreational property prices have increased steadily over the past few years with increases of 10 to 20 per cent.
“Recreational property prices in this area are not tempering like they are in much of the country’s housing market as a result of buyers selling their properties in other cities and purchasing in the Lake Winnipeg area because of its affordability,” said Jim Muir, sales representative, Royal LePage Dynamic Real Estate.
“Buyers are also willing to pay more for a recreational property than for their home, as they seek long-term settlement.”
Interested buyers seek four-season, waterfront cottages and homes with specific features such as Internet access, proximity to the city and luxury amenities such as additional bathrooms.
Property prices in Lake Winnipeg range from $60,000 to $600,000, but on average a land-access cottage without a waterfront location, ranges from $100,000 to $250,000, compared
to $90,000 to $125,000 in 2007. A
waterfront access property ranges from $250,000 to $360,000 compared to $225,000 to $300,000 in 2007.
Victoria Beach, Gimli and the south end of Lake Winnipeg are home to the most expensive properties in the area. More affordable properties are located further north of Gimli, as well as in Grindstone Park and Hecla Island.
Matlock, Winnipeg Beach and Gimli are attractive for young families where beaches abound and activities are endless for children. All areas are appealing to baby boomers, however, Gimli is attractive for its movie theatres, restaurants and shopping.
The most expensive property in the area is currently listed for $489,000, and is located in the Gimli area, featuring a 2,700 square-foot, four-season home on 2.9 acres, fully renovated with a new addition. On the other hand, the most affordable property is listed for $47,500, and is located on Grand Marais featuring a basic, non-winterized older home.
Lake of the Woods is also a popular recreational destination, known for its abundant shoreline and kilometres of waterways, while nearby areas BlackSturgeon and the Winnipeg River are sought after for their comparatively
affordable properties ranging in price from $250,000 to $400,000.
A standard waterfront property
on Lake of the Woods ranges from $400,000 to $800,000; an increase from $350,000 to $750,000 in 2007. A standard water access property ranges from $300,000 to $600,000, compared to $250,000 to $600,000 in 2007.
“Property prices in the last year have increased an average of five to 15 per cent and are expected to continue to
increase into next year,” said Loren Knopf, CRA, real estate appraiser, Royal LePage Landry’s For Real Estate Kenora. “Despite early sales being affected by a slow spring, the market is expected to do well during the rest of the season.”
The most luxurious property is currently listed at $3.2 million. More
affordable properties can be found on the smaller lakes with the least expensive properties currently listed in the $100,000 range. Smaller lakes are suitable for young families who seek affordability, while waterfront condominiums in Kenora appeal to baby boomers looking for low-maintenance recreation properties.
In almost all the nation’s summer hotspots prices have continued to rise in 2008, but at a considerably slower rate than in the previous year. This moderating trend bodes well for cottage seekers — particularly the young professionals who make up the single largest group of those planning or considering a cottage purchase (19 per cent), according to the survey.
The survey showed that Canadians overwhelmingly see the benefit of owning real estate — be it a primary residence or a cottage; the survey found that nearly two-thirds of cottage owners and those who plan on buying a recreational property feel that buying a cottage is a better long-term investment than buying stocks, bonds or mutual funds. In fact, the survey revealed that 15 per cent of recreational property owners possess more than one recreational property.
“Mirroring the trend we are seeing
in urban real estate markets, recreational property prices continue to rise, albeit at a slower rate than in recent years,” said Phil Soper, president and CEO, Royal LePage Real Estate Services.
“Improving supply has helped temper price increases this year, which will have a disproportionately favourable impact on cottage seekers when compared to their city counterparts. The Canadian recreational property market has been notoriously short of supply for several years.
“The fact that an increasing number of young people are joining more mature adults in the quest for a recreational retreat comes as no surprise; today’s young adults are increasingly savvy when it comes to investments. The
average age of first-time homeowners continues to drop. It’s only natural for this trend to spill over into the cottage market.”
Despite moderating prices, huge disparities continue to book-end the country’s most expensive and most
affordable properties. Recreational playgrounds that are frequented by Hollywood celebrities and Canada’s elite, such as Kelowna’s Okanagan Valley, The Muskokas, and Nova Scotia’s South Shore, boast properties that command price tags upwards of $1.5 million.
A little more than half of cottage-craving Canucks, who are likely to buy or are planning to buy a recreational property, have budgeted to spend
between $50,000 and $300,000. Some very modest would-be buyers will have to do a lot of searching to find their wilderness retreat, as 33 per cent of these respondents said they were looking to spend less than $50,000.
It seems that the blazing weekend warriors have finally simmered
down. Once known for their boundless levels of energy come Friday at
5 p.m., a startling truth has now
come to light: once at the cottage, their fire seems to flicker out. When it comes to activities at the cottage, a dramatic 45 per cent of cottage owners would rather catch up on sleep, than have a “romantic liaison” with their partner.
Given most people’s hectic social schedules in the city and busy work
demands, it comes as little surprise that catching up on sleep at the cottage is a priority. For some cottage-goers, R&R will be hard to come by, as 16 per cent of respondents won’t be able to escape the rat race, claiming they will continue to work from the cottage.
While there are an infinite number of elements that make a recreational property special, Canadians list the most important features to be pristine waterfront, four-season capability and low-maintenance property.