The lakeside cottage is still a favoured weekend and vacation retreat for many Canadians. But, these days, recreational properties are much more than small log cabins with few amenities and outdoor privies.

The general preference has always been for properties with water frontage and their own beaches. And the current trend is to replace the tiny cottages of old with luxurious homes, often winterized for year-round living.

"Demand for recreational property has sent waterfront prices spiraling upward," points out the most recent RE/MAX Recreational Property Report in reviewing trends and prices across the country.

As the 2007 report released last week points out, "Luxury recreational property sales are set to soar in the coming months as affluent baby boomers drive the demand for upscale products from coast to coast."

According to the report, the top end of the market appears to be gaining the most. Teardowns, custom-builds and major renovations are changing the shorelines of lakes and rivers across Canada. While Atlantic Canada still offers buyers "the best bang for their buck," limited inventory has contributed to increasing prices in more than half the markets across the country. Starting prices are over $500,000 in a third of recreational property markets and very few areas offer waterfront properties under $250,000.

In the most popular locations, particularly in British Columbia and southern Ontario within striking distance of Toronto, multiple offers and bidding wars are common, even for properties topping the million-dollar mark.

In the hot Alberta market within an hour's drive of Calgary, there is "little resistance up to the $1.5 million price point." This includes recreational properties in areas such as Canmore, where the Rockies create a "limited footprint for development," and Sylvan Lake.

In Ontario, the mild winter has kick-started real estate activity early. Just as catalogues and stores begin displays of outdoor furniture in April, recreational property prices start increasing, says Kanata-based Royal Lepage realtor Peter Smith.

"Recreational properties tend to go up earlier in the year than other properties," he says. "Just when people get the outdoor itch."

That itch is particularly inclined towards waterfront properties, which are generally up to 40 per cent more than properties without lake or river frontage. The differential can be even higher, he points out, in the parts of the National Capital Region where "more people are hanging on to waterfront properties" and the inventory is limited. The exception in the Ottawa area seems to be Constance Bay. Here, price differences between waterfront and other properties are not as great, because part of the bay is in a flood zone.

One of the hottest recreational property markets within easy driving distance of the NCR is the lake-rich Westport area where numerous properties are listed in the $500,000- to $1-million range. Here, the differential between waterfront and non-waterfront properties is "huge," says Coldwell Banker realtor Terry Bryan, a.k.a. "the cottage guy."

Take, for example, one of his current listings on Benson Lake in the Rideau Lakes. This four-bedroom home on one acre of wooded land has 200 feet of water frontage and a double boathouse, as well as a double garage, a hot tub room, assorted decks, a wood-burning fireplace and central air conditioning. The asking price is $795,000.

Other "cottage listings" include a similarly priced custom-built, four-bedroom log house on Big Rideau Lake. A three-bedroom bungalow on Deer Lake, with 650 acres and two kilometres of private lakefront, is priced at $999,500. This property also includes guest and hunting cabins. And, promises the promotional material, "this fabulous property with outstanding natural beauty is just 15 minutes west of Perth, an hour from Ottawa and close to Westport."

Meanwhile, a small waterfront cottage at Wolfe Lake on 95 acres with 1,300 feet of shoreline and its own beach is listed at $795,000.

To date this year, prices have risen more than 20 per cent in some parts of Ontario, around Goderich, for example, where "the starting price for a three-bedroom winterized recreational property on the water hovers at $400,000, while a non-winterized home starts at $250,000," says the RE/MAX report.

In eastern Ontario, the report refers to Prince Edward County, with its vineyards, antiques markets and provincial parks, as "the next Niagara-on-the-Lake." Called "one of Ontario's best-kept secrets" in the 2006 report, Prince Edward County sales have slowed somewhat since last year, although the upper end of the market – with properties at $800,000 and above – remains strong.

Buyers from Toronto and Ottawa appear to regard the Kingston area as something of a "bargain" market in terms of waterfront properties. "Realtors in the area are now compiling lists of interested buyers who are just waiting for the right property," says RE/MAX. Starting prices for three-bedroom, winterized recreational properties on the St. Lawrence around Gananoque are from $400,000 to $500,000.

In the NCR, says RE/MAX realtor Rosemary Keneford, prices on recreational properties are similar to last year, although there has been a major upswing over the last four or five years.

Meanwhile, in the Westport region, prices have risen steadily at around 10 per cent a year, says Mr. Bryan. "We are in the heart of the Rideau lakes and the head of the Rideau River system," he points out. "I am anticipating a similar increase in property prices this year."

By Iris Winston

Special to the Ottawa Business Journal