BMO chief economist Doug Porter said that the Bank of Canada’s rate increases throughout 2022 and 2023 would probably continue to stymy chances of a significant economic upswing.
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 9, 2024
When could buying a cottage in 2024 make sense?
It goes without saying that carrying costs for the purchase will be much higher than during the boom years of 2020 and 2021, when slashed interest rates gave scores of borrowers access to cheap credit. Still, the fact that prices have dropped in recent months may also suit particular buyers, according to Donaldson.
“Again, it’s a personal decision,” he said. “It’s not like an investor saying, ‘Hey, the market is going up 10%. Let’s go buy a rental property.’ It’s really kind of irrelevant. If you’re going to buy a cottage, I always say to buy based on the long term, so you’re going to hold it for 10-20 years.
“And if you do so, I think 2024 is a good market where rates are coming down slightly, and you can maybe even negotiate the price a little bit more than you used to in the past and go find that cottage compound that you’ve been looking for.”
More balanced market good news for interested buyers
During the pandemic, bidding wars and properties selling for tens of thousands of dollars over asking price were fixtures of the cottage market, resulting in a feverish and highly competitive environment that squeezed out many prospective buyers.
A more balanced market in 2024 is better news for those who are in a position to bid for a cottage property, Donaldson said, because it presents more leeway for negotiation and a good deal instead of bloated prices and a series of competing offers.