The Toronto and Vancouver housing market have been hot, but can the same be said for the recreational home market? Rob Serediuk, cottage realtor and host of “What’s For Sale?” on Cottage Life TV, speaks with Kim Parlee.
We'll bring it right up.
You are going to see the Toronto and Vancouver housing market has been red-hot for quite a while.
The average detached home prices are well above the pre-financial crisis marks.
But can the same be said for cottages and the recreational home market?
Here with me is Rob Serediuk.
He is a cottage realtor and the host of "What's For Sale" On Cottage Life TV.
Great to have you here.
Great to be here.
So is it -- we've seen what's happened in the detached home urban markets in Canada.
Can we just say, yep, that's the same thing for cottage country?
If that was the case, I would be a very happy realtor.
And that's not the case.
That is not the case, no.
Unfortunately, we do not see parallels between urban markets and recreational markets no matter where you are in Canada.
You were chatting with us earlier and said there was -- you know, something quite significant happened around the financial crisis in the States in 2008.
Explain how that impacted the Canadian cottage market.
And by the way, there's no such thing as a Canadian cottage market -- but the different cottage markets.
So when the US went into the Great Recession in 2008, one of the major things that happened is Canadians went south to buy, right?
So they were scooping up properties in Florida, Arizona, at great prices.
And we also know the loonie was a really good deal back then.
So what that did is it prevented them from buying cottages in Canada.
What we're seeing now is we're seeing a return to what was happening pre-2008.
So a big trend that we're seeing are the Baby Boomers.
The Baby Boomers are actually not going south anymore, and they're coming back to Canada and purchasing recreational properties, which is a very good sign.
So we're starting to see a lift now, perhaps.
But that hasn't been the case in the past little while.
It has not been the case, no.
Properties lost as much as 30% to 40% in equity in the crash.
And, you know, the issue with recreational properties in Canada is we have so many different real estate boards and the data is not there that brings it all together.
And it's also very region-specific, right?
So we all know Muskoka, where I live, is always going to be Muskoka, and it's going to see high-end sales.
But what a lot of people did was they thought these different new areas were going to be the next Muskoka, so they would buy in that area and speculate and build, and it turned out not to be such a great investment.
On that, you've got some examples here which are pretty, I say, spectacular examples not because it's good news, but it's like, wow, I had no idea.
This is a cottage we're going to bring up that was in Haliburton in 2005.
I'll let you tell the full story here.
The owners bought a lot.
They built in 2007.
Tell us more now.
What did they try -- oh, here we go.
They tried to sell for what, and what actually happened?
So they bought the lot for $200,000, which is amazing.
200 feet of frontage, 4 acres.
Unfortunately, Haliburton did not have any high-end sales to support that.
They got in it for $2.4 million.
So when it came time to list -- they, of course, wanted to make some money -- they listed for 3.4 million.
And the listing was on the market for four years.
They sold for 1.42, so they lost a million dollars.
They didn't even get back what they put in.
Not even close.
Would that be different, do you think, five years from now?
I'm just curious.
I mean, it's hard to say.
I think so, yes.
Because what we're starting to see is, Muskoka kind of drives everything in Ontario, right?
So as prices go up in Muskoka that is going to push buyers into other areas.
Here's another one, another Haliburton property we're going to look at.
And it was bought in 2013 for 650,000.
It's gorgeous, by the way.
These are gorgeous properties.
Eco-logs, so really on-trend, what buyers want.
The buyer got it for, like, market value, because it was at the bottom of the market, did smart renovations.
So it had an unfinished basement, so they finished the basement, increasing the total square footage.
And most importantly, everything was there in terms of the lot.
With a cottage, it's not just about the house, it's about the lot.
What's the waterfront like?
What's the exposure?
What's the views?
So if you make a smart purchase, you can make money on a cottage.
They sold for $740,000.
So over a two-year period, I think they probably spent about $20,000 in renovations.
So they actually made a good chunk of change.
Not Toronto money.
It's so funny because, you know, you're so distorted now.
When I look at that number I'm like, ah.
But it's only because we're so distorted by the Toronto market.
I mean, that is a perfectly good and reasonable return over a couple years.
A great return.
And you've got to remember too, a cottage is a lifestyle investment as well.
I was driving down here to come to this interview, and, oh, my gosh, driving from Muskoka, the hustle, the bustle, the people, the cars, the traffic.
A cottage is an investment in your life to relax, get away from the city.
So if you can make a little bit of money at the same time, perfect.
Where do you think is the best -- where is hot?
Where is reasonable?
And where is affordable?
In 45 seconds.
How do you like that?
It just depends, Kim.
Honestly, it depends on the price category that you're talking about.
Right now, in Haliburton 300,000 to 500,000 is hot.
In Muskoka, 1 million to 1.5 million is hot.
It depends on your budget and, of course, how far you're willing to travel from where you live to the cottage.
Such a pleasure.
Thank you for driving down.
He's a cottage realtor and host of Cottage Life TV.
And he joined us here in the studio.