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Recreational Property Markets Thriving; Main Buyers, Gen X Couples With Kids


Under Market Updates

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June 27th, 2016

As in the town, so in the country : sales volumes increased over last year in the majority of Canada’s recreational property markets. The quintessentially Canadian cottage lifestyle is as popular as ever. Retiring to a rustic cottage or fully-fitted home by the lake or seaside is still the dream of many Canadians of a certain age. But as in previous generations, most buyers of cottages, cabins and chalets are families with children, in which the parents are aged 36 to 51 : Generation X. They outnumber the Baby Boomers in this market by about two to one, according to a report on the recreational property market from Royal LePage.

The predominance of this demographic in the market was “interesting” to Royal LePage president Phil Soper, given that most of those surveyed for the report identified retirement as a main reason for buying a recreational property. Though still decades from retirement, Gen X buyers have reached “a place of stability,” Soper said, and already own a primary residence in the city. They buy a recreational property for family enjoyment in the near term with an eye to retirement in the longer term. Which is not so different from what young families have been doing for decades.

The family status of the typical Canadian recreational property buyer is a couple with children, according to 76% of survey respondents. When asked about the most prevalent age range of current buyers, 63% of respondents identified Gen Xers (36 to 51 years old), almost double the 33% who identified Baby Boomers (52 to 70 years old).

What is different, especially in Ontario, is the price they now have to pay. While it’s possible to pick up an oceanfront home in Prince Edward Island for $150,000, the cheapest average lakefront property in Ontario listed in the Royal LePage report is $230,000, in the Sudbury area. Lakefront properties in the highly desirable areas of Muskoka, the Kawarthas, and Southern Georgian Bay average from $700,000 to $845,000.

Another difference is in the dynamics of the market. Sales activity in the Kawarthas region, where the average price is $700,000 for lakefront, has increased over last year. Again, typical buyers are couples in their mid-thirties and forties with young children. But price increases, unlike those in Toronto, where many of the buyers come from, have been small. It is not uncommon for a property to sit on the market for twelve months, almost unheard of in Toronto. For the right property with the right price, however, a sale will come quickly.

It’s a similar situation in Haliburton, three hours from Toronto. Prices are still around 2007 levels, with an average lakefront property selling for $400,000, the Royal LePage report says. Buyers from Toronto, especially if they are near retirement and have built strong equity in their primary residences, can find great value in Haliburton.

Resort/condos a bargain in Ontario

One home option where Ontario offers a bargain for a change is the resort/condo. From the number of recreational communities where a condo is an option—just two are included in the Royal LePage report—it would seem that there’s room for development here. In one of the areas where condos are available, South Georgian Bay, high demand has led to a “significant” inventory decrease throughout the region, the report says. Much of the demand is from Baby Boomer retirees who are taking up full-time residence. This is possible in South Georgian Bay, which includes Meaford, Thornbury and Collingwood, and bills itself as a true four-season recreational market. The average price of a condo here is a reasonable $250,000.

The only other area where condos are available in Ontario’s recreational markets is the Kawarthas, also considered a year-round destination. The average price there is just $145,000.

In contrast, a condo in Quebec’s Laurentians will cost an average $350,000, while Canmore, Alberta tops the category with the average condo costing $750,000.

Recreational Property Markets Thriving; Main Buyers, Gen X Couples With Kids by Josephine Nolan | Condo.ca

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