Like we can't predict what to expect in the unchartered territory of a tariff war against our closest trading partner nobody knew what to expect would happen in a global pandemic. What we surprisingly did was to eat up recreational properties like the cookie monster eating cookies. In many instances it was in a bidding war at inflated prices in order to live our dream isolated away from others.
However, once the cookie hangover kicked in and with the added combination of increased interest rates, the dramatic run-up in prices has made it significantly more difficult for people to buy real estate, never mind a cottage. This has caused things to be a buyer's market if they have the funds to buy with the current interest rates and can find a cottage to pick-up at what one would consider to be a steal of a deal during the heyday buying frenzy of Covid. This is actually the best time for cash only purchasers as they are not impacted by the increase in interest rates.
However, sellers are holding out on selling to avoid a huge loss in their investment in the hope that interest rates soon drop as well. One would have expected that with last year's announced summer capital gains increase that was postponed and now eliminated, there would be an "uptick" of new listings as cottage owners who intended to sell in the coming years would have tried to offload their cottages before the capital gains tax interest came into effect. That might have occurred in some instances but I have been told that there was no real surge of listings or pricing.
Once either interest rates continue to drop or not and the mortgages of cottages bought during Covid need to be renewed, there is no guessing at to what might happen to the cottage market going forward.
If the pendulum of the market ever sways in 2025, our licensed Ontario lawyers Norm Synder and Kevin Nenka are here and fully insured for Ontario transactions for any purchase, sale, or financing and the like in cottage country or the whole of Ontario and are glad to assist you as much as we can.
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