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Vacation Property Real Estate in Ontario’s Cottage Country – A Look Forward

The vacation property real estate market in famed cottage country of Ontario has literally been on a tear over the past several years, as has the market in general. There are many reasons for this.

Since the collapse of the tech market in 2001, real estate has seemed to be a safe haven for equity rather than speculating on unproven concepts without any hard assets to protect the investor. Interest rates have steadily declined partly because of a US monetary policy designed to keep inflation in check and also to keep the economy primed at a time when there was concern of it faltering. Now rates have turned around and are moving back up – but slowly and in very measured cautious manner.

Other economists talk in terms of larger macro economic and demographic perspectives noting that the baby boomers are well

past the years when they were so huge in numbers that they literally created a huge market for mortgages to purchase real

estate to raise their young families in the 1970′s and 80′s. Higher demand – ergo – higher costs to borrow money. That may

be true but it’s probably a bit more complicated than that.

With most boomers having paid off those mortgages long ago, the generation following in its footsteps, while still demanding housing, simply isn’t as large. But boomers are now poised to spend some of their hard earned wealth on recreation property and they are also set to inherit the wealth of the parent’s generation which will have unprecedented effects on the real estate market in the coming years.

Most real estate gurus are predicting that the market for recreation and vacation property real estate will continue to

remain strong although there could be some bumps along the way depending on several unknown factors, which we will discuss in our next article (forces driving it).

But keep in mind that vacation property is always more volatile than residential real estate because it is a luxury item. When times are good, vacation property demand sores, but when times are tougher, it’s the first asset on the family books that goes on the chopping block.

That being said, waterfront property is a finite commodity and Ontario’s cottage country and Muskoka in particular has much of the finest land and lakes in the world. So if you can handle a few bumps in what is otherwise likely to be a long term upward ride, consider investing in vacation property real estate in Ontario.

In our next article we will list and discuss some of these real estate market forces or Wild Cards in a bit more detail to help you start to see and comprehend the larger market issues affecting recreational real estate.

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