Forget buying a house in Toronto: Cottages are the new ownership dream for young people, says report

With the high cost of real estate in Toronto pricing out many first-time homebuyers, millennials are starting to look north of the city — way north.

Two-thirds of Canadian millennials would consider buying a recreational property like a cottage or cabin

Suzanne Martineau lists a range of properties in the Muskoka region, but residential home sales have seen "unprecedented" growth. An example of such a home is this custom four-bedroom log home in the town of Bracebridge, listed at $729,000. (Suzanne Martineau / RE/MAX Hallmark Realty)

With the high cost of real estate in Toronto pricing many first-time homebuyers out of the market, millennials are starting to look outside the city — way outside.

They're not looking with the intention of buying a home, but rather buying a recreational property like a cottage, cabin or ski chalet.

A report released this week by RE/MAX and Leger said almost two-thirds of Canadian millennials would consider buying a recreational property in the next 10 years.

Fractional ownership is one way buyers are allowing themselves to purchase secondary homes, like this two-bedroom property in a resort community by the Trent River, listed at $129,000 for a yearly 6-month occupancy. (Suzanne Martineau / RE/MAX Hallmark Realty)

Adrienne Atkins, 29, falls into this group, having just recently bought a property in Grand Bend. 

"It's really unaffordable in the city, I wanted a bit more bang for my buck," Atkins said. The Yonge and Eglinton resident doesn't yet know if she'll make Grand Bend her forever home, but said she would consider moving if she could find flexible work.

Residential sales 'unprecedented'

Suzanne Martineau has also seen an increase in millennial interest in the Muskoka region, where she leads a team of agents with RE/MAX Hallmark Realty. She describes the growth in residential sales as unprecedented, and said it's "definitely being driven by the city."

I hear often, the city is too congested, it's getting too busy, it's unaffordable, it's not an enjoyable lifestyle.- Suzanne Martineau, RE/MAX Hallmark Realty

"I hear often, the city is too congested, it's getting too busy, it's unaffordable, it's not an enjoyable lifestyle… so [people] are rethinking their choices in life," she said. "With technology, I think it's allowing people to be employed further from core centres in this country."

Martineau added that millennials she's met who have moved to the Muskoka region "know what they want" and that they're making "very active choices to be in a more natural environment."

Suzanne Martineau, a Team Leader with RE/MAX Hallmark Realty in the Muskoka region has seen a huge demand for residential properties, including off-grid properties. (Suzanne Martineau, RE/MAX)

"Some of them raise chickens, some of them live on three or four acres … some of them want to be off-grid," she explained.

Off-grid trend is growing

The off-grid trend is one Martineau said has grown in the last year, noting that in the past off-grid properties were difficult to sell — whereas now they're purposely being sought out.

Laurie McVey, 29, is a Toronto office manager and executive assistant who started her search for a recreational property in the spring. 

Laurie McVey felt priced out of the Toronto real estate market, so shifted her search toward the Muskoka area, with the goal of purchasing a recreational property. (Laurie McVey)

Despite making "fairly good money," the reality of buying a home in Toronto "will just never happen," she said. 

"Even if I can get a home in Toronto, it's only going to be a shoebox, and I don't want a shoebox," she said, adding that she has two dogs and that condo life is not conducive to pets.

After years of frustration seeing real estate prices rise at rates that didn't match the increase in her salary, she contacted a real estate agent in Muskoka. Unlike her friends, who she said have moved out of the city to own a property, she plans to buy a recreational property, which she could potentially rent out when she's not using it.

Listings in cottage country down

The increasing popularity of recreational properties is well-reflected in real estate listings and prices. In Muskoka, the number of listings is down 41 per cent since 2016, with sales up 21 per cent in the first quarter. Martineau speculates that residential sales will be even "more extreme" for the second quarter — which tends to be the region's busy season.

Large lakefront properties are still popular, but listings depend on the weather, said Martineau. This property, with two waterfront cabins and 80 acres of land in the Baysville area is listed at $789,000. (Suzanne Martineau / RE/MAX Hallmark Realty)

Prices have also jumped, with many properties being sold at asking or above, and bidding wars becoming more common, which Martineau called "very unusual."

She credits some of that to city buyers.

"They're coming from a very aggressive environment and bringing those behaviours with them … which isn't always necessary up here," she said. "It's been interesting to watch how buyers are coming up from the city and placing offers on properties — they're coming in strong, hard and firm, even without competitive bids."

This behaviour is also reflected in other popular cottage-country areas, to the east of Muskoka.

High-end waterfront cottages are in demand, but the majority are still sold under $1 million, said Martineau, like this recently sold island property on Lake Muskoka with five bedrooms and a boathouse, which sold for less than $1 million. (Suzanne Martineau / RE/MAX Hallmark Realty)

Take for example the region of Haliburton, which has seen a 42 per cent increase in year-over-year prices for non-waterfront properties. That being said, even with the price hike, the average price of a property in Haliburton is $66,038 according to RE/MAX — a steal for anyone used to Toronto prices.

Waterfront properties have also seen a jump, with prices in regions like Prince Edward County, Wasaga Beach and the Bruce Peninsula seeing growth of up to 38 per cent.

This fractional ownership property on Lake Joseph will set you back $99,000 a year for 10 weeks of ownership, which includes a golf membership. (Suzanne Martineau / RE/MAX Hallmark Realty)

Get a local real estate agent

Martineau does have one piece of advice for people from the city looking for recreational properties: get a local agent. The regions are so wide and have certain quirks, so agents who do most of their business in the city may not be aware of certain specifics — which could mean a buyer pays more than the property is worth.

There are some things Atkins said she would miss about the city, including the conveniences and having everything within a five-minute walk. But, she said: "I've lived here my whole life so I'm good to move somewhere quieter."

McVey echoed Atkins's feelings, saying: "Getting away into a small town is a huge relief from being in the city," adding that she won't miss much about Toronto.