Gas prices affecting cottage prices

Higher gas prices and an uncertain economic outlook means cottage country is becoming further out of reach for some buyers - even as prices soften for some Canadian recreational properties. After a decade of substantial price increases, a significant jump in listings on the market and fewer buyers have resulted in starting prices that have started to decline in some areas, according to a report by ReMax Ontario Atlantic Canada released today.

Of 45 Canadian markets surveyed, ReMax says 67% reported falling sales.

While most markets saw prices remain flat or increase slightly, some areas are starting to see decreases for the first time. Starting prices in popular Ontario towns such as Haliburton, Bancroft and Parry Sound were down from 10 to 20 per cent, according to ReMax.

In Haliburton, a starter waterfront cottage can be bought for $275,000, down from $350,000 last year. In Parry Sound, a similar cottage can be purchased for $180,000, down from $200,000.

“It’s been a sluggish market. I think given the economic conditions you have to have your head in the sand if you don’t acknowledge that there’s a correction around the corner,” says Muskoka-based realtor Anita Latner.

With the Ontario economy slipping into what may be a recession as the manufacturing sector takes a major hit from layoffs and downsizing, purchases such as vacation homes are typically the first to go.