The Bank of Canada's decision to hike the country's interest rate once more could put a damper on dreams of spending the summer at a newly-purchased cottage.
The key rate's hiked by quarter of a percentage point to five per cent will make the purchase of recreational properties even more difficult. Muskoka chairs sit on a dock looking over Boshkung Lake, in Algonquin Highlands, Ont., Monday, Oct. 5, 2020. THE CANADIAN PRESS/Giordano Ciampini
TORONTO – The Bank of Canada’s decision to increase the country’s interest rate once again could put a damper on dreams of spending the summer at a newly-purchased cottage.
The key rate now sits at five per cent and will make the purchase of recreational properties more difficult to manage for those seeking mortgages.
The move comes as the cottage markets in many areas are seeing a slowdown that Royal LePage said will leave the aggregate price of a single-family home in Canada’s recreational regions down 4.5 per cent this year to $592,005.
While buyers of luxury properties in Ontario’s Muskoka region have been more immune to interest rate shifts, area real estate agent Heather Scott says people eyeing recreational homes priced between $800,000 and $1.6 million are the group of buyers most affected by the rate changes.
These people tend to be looking for older, family cottages and are willing to sit on the sidelines until the market produces their ideal buying conditions or at least clarity around where the market is headed.
Like Scott, real estate agent Arthur Parks has also seen cottage sales slow and says that the number of waterfront properties in Peterborough County that sold this year is 80 per cent of the number that changed hands last year.
