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Cottage Life

What information are cottage sellers required to disclose to buyers?

A small beach house in Bayfield, Ont. overlooking Lake Huron has become the focal point of a $2.2 million lawsuit, according to the CBC.

Michael Bousfield and Leah Stumpf, a couple from Guelph, Ont., were in the process of purchasing their dream vacation home when the seller told them three days before closing the deal that the property was uninhabitable due to an eroding shoreline. Having already arranged their financing, the couple was forced to proceed with the purchase and has since launched a lawsuit against the seller, as well as the Ausable Bayfield Conservation Authority (ABCA) and the municipality of Central Huron, after the two governing bodies wouldn’t issue a permit to fix the shoreline without the couple paying for a coastal engineering report.

The case will be heard in a Toronto courthouse.

Negotiating real estate deals can be tricky. As it turns out, sellers aren’t legally required to tell you everything about a property. To avoid any legal troubles, here’s everything you should be aware of when you’re looking at a cottage and whether the sellers are required to declare it.

Patent defects

Roof leaks, foundation cracks, and window breaks. According to the Real Estate Council of Ontario (RECO), a patent defect is any visible issue with a property. They’re easy to spot—this could be a stain on the ceiling from water damage or a missing safety rail. Due to their visibility, the seller is not required to disclose these defects. To ensure you don’t miss any patent defects, RECO advises that you ask the seller and their realtor specific questions about the state of the property, and hire a home inspector to have a thorough look.

Latent defects

These issues are harder to see, so hard that even a home inspector might miss them. They’re the kinds of things that only the seller would know about, such as a basement that floods each spring, a quickly eroding shoreline, or any hidden damage or mould. Sellers are required to disclose this information to buyers. “If a seller is aware of such a defect and doesn’t disclose it, they can be exposed to a lawsuit by the buyer,” RECO says. The latent defect must be disclosed before the buyer enters a contract of purchase. If the buyer discovers a latent defect after purchasing the property that wasn’t disclosed by the seller, they have two years from the day the defect was discovered to launch a lawsuit.

Stigmas

Stigmas don’t affect the property’s appearance or structure. Instead, they’re past events that could cause the buyer to rethink their purchase. For instance: a murder on the property, an illegal grow-op, a notorious individual who lived there, or even rumours about the property being haunted. Since some buyers may be more comfortable with these stigmas than others, the seller is not required to disclose this information unless it affects the price of the property. The onus to uncover any stigmas falls on the buyer and their realtor. RECO recommends asking the seller and their realtor direct questions about the history of the property, researching it online, and speaking to neighbours.

Seller Property Information Statement (SPIS)

When looking at a property, the buyer can request a SPIS from the seller. This is a form filled out by the seller that outlines all of the potential defects and damages they’re aware of on the property. It’s a good way to get an overview of any problems you should be looking for. However, an SPIS is voluntary. A seller is not required to fill one out. RECO emphasizes that real estate transactions operate on a “buyer beware” system. In most cases, it’s up to the buyer and their realtor to uncover a property’s flaws. If a seller is unwilling to provide a SPIS, the buyer should have the home inspected by a professional and ask specific questions about the state of the property before entering a contract of purchase. Sellers are legally required to tell the truth if asked about their property.

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Cottage Life

Listing of the week: This custom-built Lake Muskoka cottage is in an unbeatable location

1176 Parkers Point Road, Gravenhurst, Ont.

Lake: Lake Muskoka, Ont.

Bedrooms: 5

Bathrooms: 4

Lot size: 0.4 acres

Frontage: 104 feet

Asking price: $3,999,999

Previous asking price: $3,495,000

Taxes: $11,456.05

Date listed: March 1, 2023

Listing agent: Curry Clifford, RE/MAX Professionals North Brokerage

About the property

Enjoy modern lakeside living in the grand Muskoka tradition in this three-year-old, custom-built five bedroom, four bathroom home that easily accommodates 12 people over three full floors with space for everyone to spread out. All in an unbeatable location on Lake Muskoka less than two hours from the 401/400 interchange and just five minutes by car—or boat—to the Gravenhurst Wharf. Many are awe-struck walking into the south-facing great room featuring cathedral ceilings, a wall of windows overlooking the water, and a Muskoka granite gas fireplace. The main floor primary bedroom is an absolute sanctuary with a walk-out to a wrap-around deck, an ensuite with a soaker tub, and a large stand-up shower. Spacious bedrooms on each level with the most scenic of office spaces overlook the great room and the mesmerizing trees and water. Other features include a beautifully appointed chef’s kitchen, a bright and large inviting lower level walk-out living space, and an outdoor space fit for entertaining. Gather on the docks, by the fire pit, on the patio, or on the wrap-around deck, each with captivating wide open views of Lake Muskoka, and enjoy the sweeping granite staircase, terraced gardens, and oversized new Jacuzzi hot tub. An incredible package for a family (or families) to enjoy as their primary home or easily rent out when not in use at a very attractive income. This is a rare gem. Furnishings package available.

What are the main selling features?

  • Gorgeous, spacious home in the grand Muskoka tradition
  • Three levels with five bedrooms, four bathrooms, and a full entertainment space
  • Unbeatable location on Lake Muskoka less than two hours from the 401/400 interchange, on a municipal road
  • Five minutes by car—or boat—to the Gravenhurst Wharf
  • Fully rented last summer and fall at $15,000 per week

What makes this property unique?

  • Great outdoor entertaining space with a fire pit and a hot tub
  • Finished walk-out basement
  • Fully winterized for year-round living

Have there been any recent upgrades on the property?

A custom-built property that’s only three years old, everything in the home is up to date.

Take a tour


Would you like to list your cottage on our website? Email listingoftheweek@cottagelife.com.

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Cottage Life

Will new housing legislation actually make cottages more affordable?

With major change brought on by the pandemic, mortgage rate hikes, and increased urban-rural migration, experts say that the cottage market is slowly returning to its usual high demand, low supply format—even with recent housing legislation meant to ease those factors.

A new StatsCan report on residential real estate investors—using data from pre-pandemic 2020—shows the percentage of investor-owners across five provinces: Ontario, Nova Scotia, British Columbia, Manitoba, and New Brunswick, with the number hovering between 20-31 per cent across the board. 

While the data doesn’t reflect what’s transpired over the past two years, reporting on investors—the first time the Canadian Housing Statistics Program has done so—signifies their increasing role in the market, which could be a bellwether for what’s to come.

Frank Clayton, a professor at Toronto Metropolitan University and a housing market expert, says the report captures a pre-pandemic trend: more investors getting into the market and driving up prices, including cottages. The pandemic only accelerated this, along with another trend—millennials moving to rural areas for space and affordability. Now, “People who bought properties out there might say, ‘This lifestyle isn’t for me’, and they’ll sell,” Clayton says. “But as the population ages and more millennials age, they’ll still be looking for more space and more recreational pursuits.”

Given recent rate hikes and a drop in housing prices and sales, Clayton says it’s a wake-up call both for prospective buyers and those who overspent. There’s also new legislation, such as the federal Underused Housing Tax, Ontario’s updated Non-Resident Speculation Tax, and Bill 23, all of which aim to broaden housing availability and cool the investor trend.

With all this in mind, it may seem that the market is giving way to hopeful cottage buyers, but Clayton says it’s unlikely the floodgates will suddenly open, given that limited supply continues to be a factor. The legislation primarily impacts urban centres, and most new developments are condos, which tend to be more difficult to pass in cottage country. Further, he says, taxes for foreign buyers likely won’t deter those in the cottage market, since many of those buyers tend to have significant wealth, or are in partnership with a Canadian and can share costs. 

Still, Clayton says increased urban-rural migration, coupled with the preference for condos could lead to a push for more of those developments in cottage regions. He points to Friday Harbour resort in Innisfil, Ont., and the recent purchase and redevelopment plans for Deerhurst Resort as examples of “millennials moving into the markets in a big way.”

So, what can this report ultimately tell us about the future of the cottage market? If anything, it illuminated the need for clearer data. For example, cottage owners were put under the umbrella of ‘investors’ even though many don’t use their property strictly for investment. “There are as many definitions of investors as there are people,” says Joanie Fontaine, one of the authors of the report. 

She says cottages are tricky for a few reasons, namely, many owners may rent their cottage for just a few days a year (not enough to qualify as an investment), and some may list their main residence in a city, but spend far more time at their cottage, making it hard to clarify primary vs. secondary residence data. She also points out that despite condos being the preferred investment property, when investors did own in a rural area, 99 per cent of the time it was a freestanding home. 

Though prices may be creeping down, for the time being, demand in the cottage market remains high. “Demand is going to be very strong, just because of basic demographic and economic forces,” says Clayton. “You can’t create more lakes and mountains.”

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Cottage Life

Cottage Q&A: Liability insurance for a remote cabin

Is it possible to get liability insurance only for a remote cabin? My concern is that a guest could get hurt, or when we aren’t there, someone could trespass (and get hurt). We are U.S. citizens, so we can’t add it onto our home policy. We aren’t concerned about fire and theft because we don’t leave anything of big value inside.—John Sterzick, via email

It’s possible. But it may not be easy. (Sorry.) Or cheap. (Double sorry.)

“It’s a challenge to get coverage for standalone liability,” admits Greg Robertson of R. Robertson Insurance Brokers in Toronto. “There are wholesalers that will provide liability only, but the cost could be more than insuring the cabin.”

Wholesale brokers don’t deal directly with the client, they communicate with the client’s broker. “It’s the client’s broker who will approach me for coverage,” says Bev Mitchell, a special risks underwriter—and a wholesaler—with Johnston Meier Insurance Agencies in Maple Ridge, B.C. “As a go-between, I have contracts with companies the broker can’t access.” 

Could installing cameras lower your insurance costs?

You’re probably going to need to shop around. Check with various local brokers who deal with cottage insurance: what’s the cost of insuring your place on a package that includes liability vs. the cost of a standalone liability policy? As an example, Peter Granata of Kennedy Insurance Brokers in North Bay, Ont., says that most premiums for full-coverage policies are between $1,000 and $5,000 per year. The minimum premium for a liability-only policy from one insurer that the brokers sourced was about $1,500 (plus tax) per year. And the maximum? It would be too difficult to ballpark. “I’m unaware of a maximum quote,” says Granata. “Factors such as property acreage and location would play a part in determining the annual premium.” 

Mitchell says that while getting a liability policy via wholesaler is generally very expensive, the fact that your cottage is remote could be a game-changer. “Many insurers either do not want to insure in remote areas or charge an extremely high rate for the building coverage,” says Mitchell. If that’s the case, going the wholesaler route might work out to be the lesser of two expensive evils. Good luck with your search!

This article was originally published in the Winter 2022 issue of Cottage Life.

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.

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Cottage Life

Before you buy, check these 10 things that can be costly surprises

Cottages or cabins are synonymous with the rest and relaxation many of us crave, and they make for a very inviting escape from the city. Whether you’re deep in search of that dream recreational property or you’re casually browsing and seeing what’s out there, it’s important to know exactly what due diligence is needed when you do find the one.

There may be more work ahead than you’d anticipated, as many people don’t realize that cottages and cabins come with hidden issues or more complicated challenges to navigate than other types of properties. This means asking the right questions and digging a bit deeper than you might initially think is necessary. RE/MAX realtor Rachel Dempster serves B.C.’s Sunshine Coast.

This is one reason Rachel always recommends using a local realtor over a city realtor who doesn’t know the area as well. “City realtors have referral networks to realtors in other areas, so it’s best to work with locals,” says Dempster. “Generally, realtors know right away if a listing falls into a more unique category that requires special inspections and due diligence.” Dempster advises looking into the following key areas, no matter where you’re looking, before you purchase a property.

Septic systems

In Dempster’s experience, about 90 per cent of remote properties require septic testing. For instance, she recently sold a 10-acre property on Nelson Island, B.C. with no septic (or electricity). While this is an extreme case, it does happen.

As a result, Dempster likes to do a quick check when it comes to rural properties just to be sure her clients know exactly what they’re in for. And you should talk to your realtor about doing the same.

Always add subjects for septic inspection to your contract,” says Dempster. Go through the system’s history—you need an adequate, regularly-serviced system or a plan for new installation within your purchase deal.

Dempster also advises checking the septic is the right size for the property, since septic systems are built based on the number of bedrooms, not bathrooms. This means an older system in a one-bedroom, two-bathroom cabin may not be sufficiently sized and could need an upgrade (which can be costly).

Another key thing to consider when it comes to water systems—where the water comes from (i.e. a well or municipal service) and whether it’s safe to drink.

Archaeological and geotechnical considerations

If you’re looking for a property in an area potentially home to archeological digs (common in places such as B.C.), be aware that your property could be subject to inspection. If anything is found, deals can be cancelled, particularly those for new builds.

Geotechnical considerations such as erosion are important too, depending on the severity. For example, “There’s a part of Half Moon Bay on the Sunshine Coast, which looks great if you go there by land. But, by boat, you’ll see a lot of erosion,” says Dempster. This further illustrates why local knowledge is invaluable.

Road access

Access to your property can come in different forms. The property may be on a township-maintained road or a resident-maintained private road. If the road is private, you may be responsible for paying to help maintain it, for insurance. Check ease of access, especially in the winter, as it can be expensive and time-consuming to clear snow.

Water access and conditions

If you are interested in boating at your cottage, you’ll need to confirm whether boat launches are restricted to owners or whether they are open to the public. You may also want to find what what controls the water level. Is the lake spring-fed? Is it part of a river chain controlled by dams? Does the water level fluctuate to allow you to keep your dock in the water in the winter. You don’t want to be caught off-guard by the water dropping five to six feet by the end of October.

Other due diligence considerations

  • Electrical systems—get an inspection to ensure they’re in good working order
  • Air quality—certain areas of the country have a high presence of radon, for example
  • Dock condition and management on either coast, including permitting and safety
  • Property lines, bylaws, and zoning—there can be restrictions on short-term rentals, for instance
  • Garbage collection—some areas don’t have it and require you to dispose of waste or recyclables yourself
  • Maintenance—ask your realtor and the previous owner, if possible, so you know what to expect

Categories
Cottage Life

Cottage country populations are booming. Are rural areas ready for the wave of new residents?

My wife, Lynn, and I purchased a cottage in November of 2019, back in the final, carefree weeks of the Before Times.

It’s not a cottage anymore.

The property we bought was unusual, the kind we never expected to encounter. The living quarters were nothing special: a modest, seven-year-old, one-storey build with a small kitchen, three bedrooms, and an open-concept living space. The location, however, was perfect for us. It was surrounded by forest with no neighbouring cottages in sight and just a short bike ride to the lake.

But it wasn’t on a rural road, nestled amid acres of wilderness. It was located in a forgotten Huntsville, Ont., subdivision six kilometres east of the city centre, a quick jaunt down Hwy. 60, and it featured the full suite of amenities and hookups: municipal water, sewer, and garbage services; plus underground electricity, phone, cable, and natural gas. All that forest was made up of dozens of undeveloped lots that had been sitting unsold for years. Our property was one of only four built parcels the entire length of the street.

At the time, we couldn’t believe our luck. We were getting all the seclusion of a rural property without the hassles of water wells, septic systems, or propane tanks. We knew that the surrounding lots would eventually get bought and built, but we expected it to happen gradually. We figured we would have this corner of Muskoka all to ourselves for another three to five years. Those three to five years lasted six months. Buyers started snapping up lots in the spring of 2020. By June, some of them were already being cleared for development. Today, there are no lots left for sale. Fresh air and birdsong have been eclipsed by the belching and beeping of backhoes. Eight new homes have been completed and eight more are under construction. None of them are modest. They are massive properties, the kind you don’t live in seasonally. The new neighbours are here for good.

I’m not complaining. It’s still a great property, and we enjoy it tremendously. Even so, the lightning pace of the metamorphosis—and the social, economic, and cultural upheaval it represents—is astonishing. That’s a lot of people pulling up stakes, churning up settled ways like an outboard in the water.

And it’s not just happening on my street. In the post-pandemic era, small communities everywhere, the kind that once welcomed cottagers for ten weeks of the summer then went quiet the rest of the year, are experiencing an influx of year-round residents. A huge chunk of economic activity is being transferred from urban to rural areas, and a whole swath of society seems to be relocating and reorganizing itself. The change is still in progress, and no one knows yet what it will look like once it settles down.

From the cottage he owns on Kasshabog Lake in Ontario’s Kawartha region, Terry Rees has a perfect vantage point on the Great Cottage-Country Migration. “There are about 600 properties on Kasshabog, but typically there would never be more than 100 families around,” he says. “Now, there’s 300 on any given day, and 500 on the weekends. And there’s more activity on the lake at all times of the year.”

Rees also happens to be the executive director of the Federation of Ontario Cottagers’ Associations, so he’s been tracking the migration in communities other than his own. “It’s happening everywhere, and the pandemic has been a huge trigger,” he says. “We know from our surveys that lots of people retired and moved to the cottage—they decided, ‘I’m close enough, I’ll take the pension and go.’ Others decided that, if they’re going to work from home, they’d rather be at the lake than in a condo.”

At this moment, you’ll likely hear a similar story from municipal leaders in most rural towns across southern Ontario. “Last April, the number of ambulance calls we received was up 64 per cent from the year before,” says Carol Moffatt, the former mayor of The Township of Algonquin Highlands, near Algonquin Park, with a population of about 2,600 people scattered across its 1,000 square kilometres. “In April! That’s shoulder season. There’s not supposed to be anyone up here in April. But our year-round population had increased.”

The migration actually began before Covid. Cottage prices have been going up for years, a reflection of increased demand for properties. Rees says the changes on Kasshabog Lake have been underway for about a decade: as properties change hands, new owners invest in upgrades so they can spend more time there. Rees says the pandemic has accelerated this process, and the data bears him out. The pandemic turned a modest trend into a mass movement.

In 2021, a total of 73,500 Toronto residents packed up and moved to other parts of Ontario. Last year, that number increased to 78,100. Other large cities across Canada have experienced a similar exodus. Back before the days of remote work and Zoom meetings, those people would have moved to a nearby suburb and commuted to the office. Now, the old real estate adage “drive until you qualify” has become meaningless— without a daily commute to worry about, you can drive as far from the city as you want.

This helps explain why, from 2016 to 2021, four of Canada’s ten fastest-growing communities were located in Ontario cottage country: Wasaga Beach (population increase 20.3 per cent), Tillsonburg (17.3 per cent), Collingwood (13.8 per cent), and Woodstock (13.6 per cent). Those all happen to be “big” small towns, ranging in population from 18,000 to 47,000. They have paved roads and restaurants and big box shopping districts and hospitals. They have some ability to accommodate growth.

For smaller villages and rural areas, it’s a different story. Those communities, which have spent years worrying about their declining populations, are now dealing with a cavalcade of new residents. It looks like an answer to their prayers. In reality, it could be a mixed blessing.

When a tiny municipality like Algonquin Highlands experiences a 64 per cent increase in April ambulance calls, it’s more than just a sign of residential growth. It’s actually a wicked problem whose solution sets other variables in motion. If a municipality puts more ambulances into service, it will need to build a new ambulance bay. And it’ll need to increase winter road maintenance so that ambulances can get to their calls, which will mean more plows.

All of this assumes that an increase in shoulder-season EMS calls is stable and reliable. But it’s obviously neither of those things right now, because the migration wave is still rising. When will it peak? What if it crests and then recedes? What are the demographics of the incoming population? What are they likely to need ambulances for? Snowmobile accidents? Slips and falls? Heart attacks while shoveling snow? Just what is the community responding to here?

The same logic applies to other municipal services. The more local parks and trails get used, the more maintenance they require—and the more complaints the municipalities get when maintenance doesn’t happen promptly. When everything in a community gets used more intensively, everything needs more intensive, and more frequent, attention.

According to Rees, these are the questions that now beset Ontario’s rural councils. “Bancroft staffs all its emergency services based on the expectation that 70 per cent of the community isn’t there in the winter. That’s not the case anymore.” As the snow melts, other problems are exposed. Hastings County, which includes Bancroft, is facing an unprecedented number of building permit requests: a total of 335 were issued for homes and businesses in 2022, with a total value of more than $32 million, compared to 243 permits issued valued at just $13.5 million in 2019. “They’re getting requests for renos, new builds, additions, outbuildings, you name it,” says Rees, who speaks regularly with officials from across cottage country. “Council agendas are jampacked. They’ve got reams of complex proposals and not enough planners or staff or bylaw officers to process them all.”

That construction, as it proceeds, is going to generate lots of debris. And the new, year-round residents are going to produce lots more garbage. So when town staff aren’t processing construction permits, they’ll be scouting new dump sites, because the current one will need replacing years earlier than expected. That’s what happened in Bluewater, a rural municipality on the shores of Lake Huron that includes the town of Bayfield. In 2019, the local landfill still had an estimated six years remaining in its lifespan; by June of 2022, thanks to mountains of unexpected garbage, it only had five months left to live— a situation that prompted the local council to refuse large loads of construction waste.

And when all the construction is complete, after all those big trucks are done lumbering back and forth thousands of times on rural roads, guess what then? Those roads will all need repaving. “All roads are built to standards based on volume, speed, and load,” says Robin Jones, the mayor of Westport, Ont., a village of 750 people north of Kingston on the Rideau Canal. “Our roads aren’t built to the same standards as the 401.”

After 40 years of managed stasis, places such as Westport and Bancroft aren’t used to thinking about these things. They’re thinking about them now. “There are scanning methods that we can use to assess wear and tear and manage the roads. We’ve learned a lot,” says Jones, who is also the chair of the Rural Ontario Municipalities Association. She is bringing what they’ve learned in Westport to the ROMA conference to share with her peers.

Needless to say, all this stuff must be paid for, and no rural community has that kind of money in the bank. Towns that go quiet through the winter can function on sedate property tax rates, but as they grow into four-season communities, rate increases are among the options on the table. Many waterfront cottagers, whose properties often come with higher tax rates than those on traditional, landlocked lots, bristle at the mention of rate hikes. But the reality is that your tax rate is based upon a set of assumptions that no longer hold true: that the landfill wouldn’t run out of space so soon, the roads wouldn’t suffer so much wear and tear, the ambulance service would more or less shut down for the winter, and the municipal workforce wouldn’t have to grow to accommodate all these new demands. “When most people were only here part-time, we taxed them accordingly,” says Carol Moffatt. “Tax rates will have to go up. It’s a basic business model.”

This is how the system works: we all pay our share for the ambulance service, even if we are less likely than others to use it, so that the paramedics don’t need to ask anyone for a credit card number before rushing them to the hospital. For those who remain part-time cottagers, however, it still stings. Their use of roads and landfills isn’t going up, but there’s a good chance their taxes will.

Whether your taxes are going up or not, your property value definitely is. For nearly two decades now, as big-city real estate prices have rocketed into the stratosphere, rural villages and cottage towns have watched it unfold like a fictional TV program. Rural house prices stayed stable, priced at levels that reflected the rhythms and the workings of a rural economy. With a good, local job, you could afford a good, local home.

As buyers move in from the city, they buy their homes with city money from city jobs. The city economy is bigger, its rhythms faster, its deals fatter. The migration is injecting massive amounts outside wealth into once-insulated communities, and not all its impacts are positive. It’s driving rural prices upward, and it’s pricing locals out. According to Royal LePage, Ontario’s average waterfront recreational property price was forecasted to hit about $738,000 in 2022, up from $653,000 in 2021—and from $413,000 just five years earlier, in 2017.

The migration is also creating a shortage of housing, particularly for renters. Westport, an historic lumber mill town, has a lot of large, stately homes. “Many of them had been subdivided into rental apartments,” says mayor Robin Jones. “With prices rising, some owners recognized it was time to sell, and the buyers turned them back into single-family homes.” Westport is growing. Its restaurants and grocery stores need workers, as do all its other small businesses. But there’s nowhere for those workers to live.

The solutions aren’t obvious. It takes years to plan and build rental housing or new ambulance bays. Meanwhile, employers have begun reversing their pandemic work-from-home policies. Those who could work remotely from the cottage might get called back to the office grind, slowing growth in rural communities.

Others may well discover, after a year or two, that rural living isn’t for them. “I think there’s a natural limit to how many people can live in small rural communities year-round,” says Rees. “It can be stark in winter. There aren’t many restaurants. There are no squash courts or pools. The hospitals are far away if you need care.” Once the migration trend hits its peak, will it plateau or slide back down to earth? No one knows for sure. Not yet at least. Jones believes that, once things settle down, the migration will solve the biggest problem previously facing small towns. “This growth will ensure that rural Ontario survives,” she says.

For now the changes are still underway, and they have longtime residents concerned about the changing character of their communities, and how much urbanity will be injected into their surroundings. “The growth is not a bad thing. It’s good news and we’re proud of it,” says Andrew Sloan, the mayor of Central Elgin, which includes the bucolic lakeside village of Port Stanley—one that’s seen a fair amount of new development. “At the same time, we want the region to be able to keep its small-town character.”

Keeping that character is both a planning challenge and a cultural challenge. “I call it going from ‘cottage country’ to ‘lakeside lifestyle,’ ” says Moffatt, the former mayor of Algonquin Highlands. “And it does come with a collision of values.” Cottagers are all about teaching the kids to catch fish and chop logs. Lifestylers prefer delivery. That’s the stereotype, anyway, and to some degree it fits. “People who move from urban centres come with different expectations of what a municipality can deliver,” says Jones. Moffatt, no longer in politics, is more plain-spoken: “The generational cottagers are accustomed to the way small communities handle things. Many newcomers want things here and now. They are surprised that they might need to bring their own trash to the landfill and are upset to learn that it’s closed on Wednesdays.”

But no one believes the cultural divide will last, and that rapprochement will come sooner than later. “Our newcomers have an interest in keeping the historical character of the community,” says Sloan. “It’s part of what drew them here.” Moffatt agrees, “These are wonderful people moving into our community. They wouldn’t be here if they didn’t enjoy the same things generational cottagers do.” The solution, she says, is old-fashioned cottage hospitality: everyone needs to log off Facebook, meet their new neighbours, and get involved in the community. “Once people get to know each other, they’ll sort themselves out,” says Moffat. “We just have to get them out of their echo chambers and into council chambers.”

This story originally appeared in our Mar/Apr ’23 issue.

Philip Preville lives in Peterborough, Ont. He’s an avid hiker and skier. He plans to try canoeing whitewater rapids this summer.

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Cottage Life

Deerhurst’s new owner plans to build thousands of recreational properties at cottage-country resorts

Besides launching the singing career of Shania Twain, Deerhurst Resort has made its name as a family-friendly getaway in the heart of Ontario’s cottage country. Nestled on the western shore of Peninsula Lake, outside Huntsville, the 760-acre property features two golf courses, tennis courts, a spa, axe throwing, cross country ski trails, and 400 guest rooms. But after a recent ownership change, the 127-year-old resort will be undergoing a multi-million dollar facelift.

In September 2021, Freed Developments, owned and operated by Peter Freed, spent $330 million to acquire Deerhurst Resort; Horseshoe Resort, north of Barrie; and development lands at Blue Mountain Resort in Collingwood from Skyline Investments Inc. Combined with Muskoka Bay Resort, which Freed opened in 2002, the purchase established Freed as the largest resort community owner in Canada.

The shift to cottage country, however, was an unanticipated move for Freed as the company has made most of its money developing condos in Toronto. The company said it plans to continue operating the properties as resorts but will develop the surrounding land with homes and condos.

“Freed’s resort portfolio will include over 1,000 existing hotel rooms and employ over 2,000 people locally. Long term, Freed is projecting to bring over 8,000 new developable units to the Northern Ontario market, with 3,000 of those units being delivered over the next five years,” the company said in a statement.

The new developments, which are being managed by Freed Hotels and Resorts, a division of the parent company, will serve as recreational properties that owners can either live in, cottage at, or rent out through the resort. Muskoka Bay Resort already has a number of villas, homes, and condo units that will be available for move-in by summer 2023. And Freed has started selling units for a condo that will be built at the base of Horseshoe Resort’s ski hill. According to Jesse Hamilton, the vice president of operations at Freed Hotels and Resorts, the same can be expected at Deerhurst.

“There have been approvals on land at Deerhurst to build mixed-use buildings, a combination of residential units and resort condominiums as well as some retail space, for close to 10 years,” Hamilton said. “We’ve already completed the plans for a new 400-room condominium hotel, which will act partially as a standalone resort in that it’ll have its own restaurants, it will have its own gym, it’ll have its own arrangement of meeting space, its own pool, but guests of this new building, and homeowners of this new building, will have access to all the amenities at the resort today.”

The new building will overlook the front nine of the resort’s Lakeside golf course. Hamilton said that Freed expects to enter the building phase soon. But first, as part of the planning process, the resort will hold a community open house with the town of Huntsville and the District of Muskoka in late February to present its development plan.

“The only reason the real estate opportunity exists at Deerhurst is because of the resort environment. There will be people who buy in this new development as an entry into having a cottage. That’s going to be a reality for a percentage of the owners; people who can’t necessarily afford a waterfront cottage due to the scarcity,” says Hamilton.

According to Huntsville planning staff, Deerhurst intends to build two buildings containing 447 units, connected by a shared entranceway. Huntsville’s town council approved development on this land in 2015 when former Deerhurst owner Skyline Investments brought forward a plan to build a four storey condo. However, the project never happened.

At the time, there was some pushback from members of the Peninsula Lake Association, who were worried construction would damage the canal between Peninsula Lake and Fairy Lake. The Hidden Valley Property Owners Association, a neighbouring community on Peninsula Lake, also had run-ins with Deerhurst over changes to its property. In 2019, the association wrote to the town about concerns it had over Deerhurst installing a series of staff trailers.

Kassandra Barker, a member of the Hidden Valley Property Owners Association, said she hasn’t received much information about Deerhurst’s proposed development, but she does have questions. “Are they going to be right on the water? Will [the owners] have boats? Will they not have boats? Do they have water access?”

Hidden Valley has a community meeting planned to discuss the development and to give members a broader understanding of Deerhurst’s plan. Until then, Barker is keeping a balanced outlook on the development. “If it’s going to create jobs in the area, then that’s a huge benefit. People get up in arms about cottage country getting too developed, which is understandable. It’s hard not to,” she said. “There’s only so much we can do to maintain the area’s cottage-country status. With massive buildings going up, that could be a huge problem.”

Deerhurst has submitted an application to the town for a zoning amendment to build on the land. As part of the application, Deerhurst must outline whether development will impact the environment, traffic, visual water and sewer, or stormwater management. If there are any impacts, Deerhurst will have to include mitigation measures it would implement to alleviate the situation.

The application will proceed through a public consultation period and then council will review it, said Huntsville councillor Cory Clarke in an email.

If council approves the plan, the sales phase for the condo units could start by late summer.

Property ownership isn’t a new concept at Deerhurst. In 2019, the resort reopened its Lakeside Lodge after an extensive renovation. The lodge included 150 condo units owned by individuals. One hundred of those units are part of Deerhurst’s rental program where the resort manages the unit, renting it out to guests, and giving a percentage of the earnings to the owner. Hamilton estimated that three quarters of the accommodations offered to guests at Deerhurst are condo units that the resort rents on behalf of the owner. The units that aren’t rented are either lived in or used as a recreational property.

In addition to plans for a new condo, Freed Hotels and Resorts will also complete a multi-million-dollar renovation on some of Deerhurst’s existing buildings. According to Hamilton, this will include updating the conference and meeting space; introducing new retail spaces at the resort, such as a café and clothing stores; a state-of-the-art gym facility, with studio space for workout classes; a club-level experience; as well as renovating 102 rooms in the resort’s main pavilion.

Despite all the changes, Hamilton stressed that Deerhurst will remain a resort, offering the same values it always has. “That will never change,” he said.

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Cottage Life

How will climate change impact your property? New real estate tool shows you

Climate change is a reality that is overwhelming to tackle. But two tech companies aren’t shying away from the issue. Instead, they’ve created a tool that allows real estate buyers to see how the climate is expected to shift around their prospective property.

Montreal-based Local Logic has partnered with San Fransico-based ClimateCheck to bring Canadian buyers a climate risk assessment.

“Climate change is transforming the real estate landscape, introducing new and costly levels of physical risk to property,” said Vincent-Charles Hodder, co-founder and CEO of Local Logic, in a statement. “Home seekers can now assess an area’s risk for climate-related disasters and, using our suite of location insights, make more informed decisions about where to buy and how to mitigate risks from climate change.”

The new tool is currently being used by Sotheby’s International Realty Canada, Royal LePage, and REW.ca for listings across Canada.

“It’s looking at 2050, and it’s saying within the next 30 years, what is the forecasted climate impact on this area for heat and for storms,” said Pierre Calzadilla, Local Logic’s EVP of growth.

The tool covers a five-kilometre radius around the property and will tell you how many hot days to expect in 2050, what the average temperature of those days will be, how many severe storms will occur, and how much precipitation to expect.

For example, a home for sale in North Vancouver currently experiences seven hot days per year at an average of 27 degrees Celsius. That number’s expected to increase to 24 days in 2050, averaging 31 degrees Celsius. As for storms, the area’s expected to see a jump from 12 significant two-day storms to 14, with the precipitation per storm rising from 885 mm to 1020 mm.

As the climate changes, Calzadilla pointed out that many insurance companies are pulling back from high-risk areas, such as floodplains, and buyers aren’t always aware. “It just helps people understand that this is a real thing. People have to take into account that there’s nowhere to hide with climate change.”

Local Logic and ClimateCheck have been providing free climate risk assessments in the U.S. for several years, presenting data on heat, storm, fire, drought, and flood. Calzadilla said that the two companies are currently working on introducing flood-risk data in Canada.

On top of climate risk assessments, Local Logic also provides information about a property’s surrounding area. For example, suppose a young family was looking to buy a new home. Local Logic could tell them the average noise levels in the neighbourhood, how close schools are, accessibility to transit, and the ease of getting groceries.

The company’s ability to provide location intelligence makes it the perfect partner for ClimateCheck, which was founded to bring climate change information to real estate owners and buyers.

“Combining ClimateCheck’s granular climate risk data with Local Logic’s location intelligence insights helps real estate brokers, investors, and consumers alike understand how intensifying hazards like flood and fire might affect their properties in the future,” said Cal Inman, CEO of ClimateCheck, in a statement. “This knowledge empowers them to make smarter decisions about where they buy property and how they maintain or improve property to guard against mounting risks.”

Categories
Cottage Life

Is now the time to renegotiate your cottage mortgage?

Have you heard about “Frugal February”? This social media trend encourages people to tackle all aspects of their finances throughout the month, no matter how small or big. For some, those goals are very big indeed, including renegotiating their mortgage.

Taking a long look at your mortgage is something that Ottawa mortgage broker Jacquie Bushell highly recommends, even if you don’t change anything. Having a robust discussion about your various options will leave you better informed and more confident about your finances (and no more feeling anxious when your nosy neighbour or pushy uncle says “Ya know what you should do with the cottage…”).

In the present economic climate, Bushell says, for the most part: “I’m in the camp of staying put… Rates are a little higher than what most people expect and nowhere near the sub-3 per cent mark. If there is no need to touch your mortgage, then don’t, and avoid a potentially higher rate than you currently have.”

Expenses are something that Ottawa and Toronto real estate lawyer Sabrina Ding wants clients to know about, noting that renegotiation often comes with costs. “Find out the penalty for ending your previous mortgage,” she says. “For example, if ‘Susan’ has a mortgage for $500,000 with a term of five years, and she decides to end her mortgage after only one year, then her interest penalty may be as high as $20,000 to $30,000. In contrast, if Susan can get a new mortgage with the same bank, then the bank will likely waive all interest penalties.”

However, Bushell notes that there are circumstances which make mortgage renegotiation a smart move these days, even when you take penalties into account: “If you are in an adjustable or variable rate mortgage and having troubles managing the increases, whether that’s financially or emotionally, you may want to consider converting to a fixed rate.” Ding echoes this sentiment, saying “A fixed rate means you get stability.”

Finally, Bushell points out that there might be special circumstances which warrant renegotiating your existing mortgage, including if you need to take out equity for debt repayment, renovations, or to build an emergency fund.“If you’re carrying large balances on your credit cards and/or lines of credit, you may want to exercise this option,” she says.

Before you make your final decision, make sure you understand the title requirements. Ding points out that the bank may require other family members to go on your cottage’s title for increased security if you have insufficient income. While it’s tempting to accept mom or dad’s nominal help, know that it comes with consequences. “If dad already has a property under his name, then going on the title to this second property means that he must pay expensive capital gains tax when this second property is sold,” says Ding.

In short, mortgage renegotiation is a good move for some cottage owners but unnecessary for others. However, everyone should know the rules, understand their options, and talk through their choices with a trusted professional.

Categories
Cottage Life

Property prices in popular ski areas are expected to drop in 2023, says Royal LePage

Royal LePage released its Winter Recreational Property Report, and they’re predicting a decrease in the median price of Canada’s ski properties in 2023.

According to the real estate company, the median price of a single-family detached home in Canada’s recreational ski regions will decrease by 3 per cent over the next 12 months to $1,011,451. Rising interest rates are expected to reign in prices, although, they did little to affect things in 2022.

Royal LePage said the median price of a single-family detached home in Canada’s ski regions in 2022 increased by 15.1 per cent to $1,042,700.

“While the rapid rise in interest rates, which began in March of this year, has caused many would-be buyers in the residential market to move to the sidelines, some recreational property purchasers—most notably in higher-end markets—have demonstrated a greater tolerance to increasing monthly mortgage costs,” said Pauline Aunger, broker of record at Royal LePage Advantage Real Estate, in a statement.

Ski chalets were particularly popular among Americans who attempted to purchase recreational properties before the Canadian government implemented its two-year ban on foreign buyers, which started January 1, 2023 (despite vacation homes being exempt from the ban). According to a Royal LePage survey, 75 per cent of Americans who currently own a recreational property in Canada said that they made their purchase after the two-year foreign buyer ban was announced. Of those Americans who don’t own a recreational property in Canada, 67 per cent said the current strength of the U.S. dollar has made them more inclined to buy a home north of the border.

Despite attention from American buyers, and the increase in prices, all ski regions surveyed by Royal LePage saw a double-digit drop in sales volume.“For most Canadians, owning a recreational property is a nice-to-have lifestyle option,” Aunger said. “In the current economic environment, it is not surprising that sales have declined.”

But Aunger added that demand for recreational properties remains healthy; it’s just moderated itself compared to the sales volume seen during the pandemic boom.

B.C.’s Big White ski area, near Kelowna, saw the biggest jump in median price for a single-family detached home in 2022 with a 45.5 per cent increase to $1,600,000. Although, sales in the area dropped by 33 per cent.

“Transactions at the upper end of the market are largely responsible for the dramatic price increases in the single-family segment, as Big White continues to attract luxury recreational property buyers. However, demand has slowed over the last year as buyers adjust to the rising interest rate environment and sellers feel less urgency to list their properties,” said Andrew Braff, a sales representative at Royal LePage Kelowna, in a statement. “As activity moderates, we are seeing fewer multiple-offer scenarios compared to last year.”

In Whistler, the median price rose by 14.8 per cent to $3,648,200, with a 35 per cent drop in total sales.

In Canmore, Alta., the median price jumped 23.6 per cent to $1,588,900, but the area saw a 41 per cent drop in sales volume, trending back towards historic norms, said Brad Hawker, an associate broker at Royal LePage Solutions, in a statement.

In Ontario’s southern Georgian Bay area, which includes Collingwood, the median price increased by 11.3 per cent to $890,000, but saw a 27 per cent drop in total sales. Southern Georgian Bay is one of the few areas Royal LePage expects prices to go up in 2023, they’re predicting a five per cent increase in the median price.

Finally, in Quebec’s Mont Tremblant, the median price increased by 23.5 per cent to $500,000, with a 38.1 per cent decrease in sales. While the median price of a condo in the area increased by 44.4 per cent to $475,000, but the area saw a 47.8 per cent decrease in sales.

“The current slowdown should help shift the Tremblant housing market back to a more normal sales cycle,” said Paul Dalbec, a chartered real estate broker with Mont-Tremblant Real Estate, in a statement. “I expect that in the coming months, slope-side luxury condos worth between $700,000 and $1 million, and single-family residences valued from $400,000 to $600,000 will be most affected by the price correction, as those properties appreciated much more during the pandemic.”