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John Aben

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Friday, 27 January 2017

Thinking of investing in a cottage on Lake Joseph or Lake Rosseau?

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Response to an email received earlier today. Hi Ted, Thank you for your inquiry into to a potential cottage purchase on Lake Rosseau or Lake Joseph. Interesting question - - What's the percentage increase in value compound yearly for a cottage of either of these lakes.   I've included a number of graphs below to aid in determining if a cottage on Lake Joseph or Lake Rosseau is a good investment.   Graph below shows the unit sales for both lakes, Rosseau at 55 and Joseph at 50 sale. Reasonable increase year over year and highest sales volume since at least 2006.     Next is the average sale price and median sale price for Rosseau. There was one substantial sale over $10MM on Rosseau that really kicked up the average price for 2016.     Same below for Joseph, but in this case the $10MM+ sale was in 2015, therefore we see average price dropping for 2016.     Because of the swings in average sale price, I thought it would be best to combine both lakes to get more data and smoothen the graph. With more data, I suspect more accurate representation of the numbers.   Below, I've included sales since 2000, rising steadily until the 2008 recession, but since has recovered nicely and surpassed the 2007 highs. I've calculated the compound percentage increase year-over-year and arrived at 5.75% for average price and 8.1% for the median price. Trendlines showing good growth and I see no reason for this not to continue this year.   Finally for some idea of what price ranges are moving more than others. The chart below represents all cottage sales in Muskoka, not just for Joseph and Rosseau. Last year only one sale over $10MM. This sale, as mentioned earlier was on Lake Rosseau. Interesting to note the larger volume of sales for higher priced cottages, $3MM-$4MM almost doubled in unit sales year-over-year. Consistent increases in all higher price ranges.      If you would like to have more details let me know.   Warmest regards, John Aben Direct: 705-788-4770