Real estate: GTA condo chill reaches cottage country

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The GTA’s pre-construction condo slump is echoing into cottage country as a conspicuous quieting in new resort-style development.

A telling example surfaced recently on Sparrow Lake in Muskoka, where a 50-plus-acre Gravenhurst property approved for a 60-unit luxury resort community recently hit the market for just under $11 million. The former Delmonte In the Pines Resort site had been marketed by locally-based MDM Developments as Luna Bay, a resort-style enclave with three-storey waterfront townhomes, 60 boat slips and roughly 20,000 square feet of amenities. Now, that plan appears to have been scrapped. (MDM could not be reached for comment.)

During the pandemic-era cottage boom, a wave of resort-style projects and recreational condo and townhome concepts responded to surging demand across cottage country. Today, many have yet to launch sales: Summerside Towns at the Oak Bay Golf & Country Club in Port Severn, Mundy’s Harbour Towns in Midland, and Aspen Shores in Meaford, among others. The Bluepoint Lookout condo project on Lake Huron near Sarnia, meanwhile, is reportedly being sold under power of sale.

Kirby Hall, the owner of Parry Sound-based Hall Construction, is seeing the slowdown on the ground. “I think the contemplation and early-stage development is happening, but sales appear to be drying up.”

While the GTA lull is being driven by factors ranging from softer resale values and higher borrowing rates to elevated construction costs and diminished investor demand, its cottage-country counterpart is a different beast, says Kelly Fallis, a sales representative with Chestnut Park Real Estate Limited in Port Carling. “There are two main factors at play. In the typical freehold cottage market, you’ve got zero inventory, so there is very little waterfront land to build on. Coupled with local building bylaws, that’s where a lot of pre-construction plans are going sideways.”

Historically, she explains, an owner with a large stretch of shoreline might have been able to sever a lot and sell it. Today, minimum frontage requirements, lake-specific rules and stricter planning constraints make that increasingly difficult. “It’s extremely hard to create new lots on any body of water, and that’s flattening pre-construction planning.”

Describing new condo and resort-living projects in today’s recreational markets as “very quiet,” Pauline Aunger, broker of record with Royal LePage Advantage Real Estate in Smiths Falls, says the COVID-19 pandemic continues to impact the preferences of cottage buyers. “I think the dream for most waterfront people today is to find a site that is all theirs, as opposed to something they’re sharing.”

Several apparently stalled projects were built around an appealing idea: low-maintenance cottage ownership. In a region where storms, flooding, repairs and seasonal upkeep can become a full-time concern, resort-style projects offered a simple pitch: buy the cottage experience without taking on all the work. “For a lot of people, maintenance is the selling feature,” Fallis says.