# Time to buy a cottage?



## Russ (Mar 15, 2010)

I would appreciate opinions on the current state of the recreational property market. I am mainly interested in the South Central Ontario area (Bracebridge, Huntsville, Parry Sound triangle).

I know there are lots of issues about whether or not this is a good investment, the tax issues, etc., but those are not my primary interest. I'm more interested in timing. 

Clearly one would like to buy any asset at the bottom of the market, just before the market recovers. I also assume volatility is greater in the recreational property market than in the residential property market. The bottoms and recovery points may also be different. 

With respect to the recreational property market would you say the market is far from the bottom, at or near the bottom or near the upturn point? Or none of the above?


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## marina628 (Dec 14, 2010)

We bought ours in 2008 and they have gone up significantly since then.Waterfront will always be at a premium ,Our property taxes have increased about 20% over past 4 years because the value has been going up every year.


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## Berubeland (Sep 6, 2009)

Timing is very bad IMHO. I don't know when this house of cards is going to collapse, I just know that it will because the fundamental supports required to keep the RE market going up are just not there.


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## OptsyEagle (Nov 29, 2009)

Your talking timing and that is impossible to do. We are definitely no where near the bottom. Rec. properties have been rising for many, many years, probably at a rate higher then residential properties.

On the one hand, a cottage is something that one can do without and therefore one might expect a faster pull-back when the time comes. On the other hand, rec. properties are much harder to finance, indicating to me that they are not currently being propped up by low interest rates to the degree residential properties are and therefore should not fall back as much when rates rise.

All that being said, I suspect that the reason that rec. properties rising so high is from 3 factors. The large amount of baby boomers in the system who are at the perfect age to want a cottage property, the incredible amount of cash just sitting around getting virtually nothing in interest and the very limited supply of waterfront properties. Once the lake has a property on every lot (which any near large cities seem to have), you can't just expand and build a suburb beside it. You now have to convince someone else to sell theirs. I don't see much of this changing.

If you are waiting for the market to come back, just to get a better price, you may be waiting a long time. I am not sure I would want to put my life on hold, waiting for this unless I couldn't afford the current properties. Then I wouldn't have much choice.


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## kcowan (Jul 1, 2010)

During the last major slump, we looked at a property on west Lake Windermere on the highway between that and Lake Joseph. It had been listed for $725k and finally sold for $300k. This was in 1991. (3 car garage, tennis court, 4 BR, 2 bath, 2 slip boathouse with covered patio on top, separate bunkee.)


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## Russ (Mar 15, 2010)

Wow, $725,000 down to $300,000! That's why I remarked earlier that the recreational property market is more volatile. I guess that's an obvious observation, but your example is pretty surprising.

I bought a small waterfront cottage in 1986 in the Bancroft area for - believe it or not - $36,000. In the following few years the values for similar properties rose to almost the $100,000 level. I lost my job in 1996 and had to sell it. There was a lot of unemployment at that time (it was the Harris era) and I could only get $55,000 for it at that time. Within a few years the market had rebounded.

It was never intended to be an investment. Had it not been for the job loss I would likely own it still. My kids will never forget those summers at the cottage, so it was well worth it to us. But it would have been a good investment if I had sold it a bit sooner or later.


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## kcowan (Jul 1, 2010)

There is no question that a cottage generates fond memories for a family. Ten weekends plus a couple of weeks every summer. Just be cautious about timing your entry. Saltspring and Okanagan properties are already down. I see north of Toronto as vulnerable.


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## chaudi (Sep 10, 2009)

Think how many cheap vacation homes there in the US? Some of the flights are as cheap as gas.


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## Square Root (Jan 30, 2010)

Buying a cottage is a lifestyle decision. We love ours and don't care what it might sell for. If you can't comfortably afford it I wouldn't go into big debt with the idea it can be sold at a profit.


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