Wednesday, 22 November 2017

Canadians Love Their Cottages, Cabins And Chalets

Written by Posted On Monday, 10 July 2017 18:37

The Canadian dream of escaping the city and buying a recreational property to enjoy nature is alive and well. Recent reports by the country's two largest real estate firms say that everyone from millennials to retirees agree that owning a recreational property is a dream come true.

"Many cottage communities in Ontario and B.C. have seen unprecedented levels of sales activity and property price increases, driven largely by Toronto and Vancouver city-dwellers leveraging their home equity to purchase a recreational sanctuary -- often with immediate or future retirement in mind," says Kevin Somers, chief operating officer for Royal LePage. "In some areas, recreational properties are seeing multiple offers. This situation is a rare phenomenon among cottage transactions, as the sales process can be very protracted."

A report by Re/Max agrees that "large numbers of retirees and baby boomers nearing retirement" are selling their current homes and buying recreational properties. "This has in turn resulted in the price appreciation that we've seen in popular recreation property markets such as Whistler in B.C. and Haliburton in Ontario," says Re/Max.

However, it's young families with children who are the key drivers of demand, says Re/Max, "including in established recreational regions such as the Okanagan Valley in B.C., Canmore, Alta., Collingwood, Ont. and the Laurentians in Quebec."

Royal LePage says the most expensive properties are in Western Canada, with Alberta recording the highest aggregate price at $816,700. "Prices in the region were driven primarily by the province's limited availability of lakefront property in close proximity to major city centres and an increase in demand stemming from an uptick in the energy sector and consumer confidence," says the report.

"On the opposite side of the country, the least expensive recreational properties were found in New Brunswick, with a provincial aggregate price of $179,500," says Royal LePage. "Within the province, buyers could fetch a lakefront property near Fredericton for a mere $86,700 -- roughly six times less than what one would expect to pay for the same property type on Canada's westernmost coastline."

Somers says, "As seen in other home segments, price differences for recreational properties from region to region can vary quite remarkably.

What remains relatively consistent across the country is that demand within many recreational markets is very much alive, with communities seeing an emergence of new buildings and homes designed for multi-season use. Buyers are seeking properties that allow them to maximize their time away from the bustle of the city, often with the plan of making a home a primary residence in the future."

Royal LePage says retirees will stay in the property until they can no longer keep up with its maintenance and will then pass it along to family or downsize. "While this tends to be more prevalent in provinces like British Columbia and Ontario, where home values are generally higher than the rest of the country, the trend can be witnessed nationwide, including in Alberta, Quebec and New Brunswick."

But it's not just baby boomers and retirees who have their eyes on a waterfront property or a ski chalet.

A survey by research firm Leger, commissioned by Re/Max, found that 28 per cent of Canadians with children under the age of 18 would consider selling their city residence to buy a cottage, cabin or ski chalet.

"Other options that these potential buyers are willing to consider include fractional ownership in a shared property, purchasing a recreational property with a friend or family member and renting out the recreational property they purchase on a vacation rental website such as Airbnb."

The survey found that 65 per cent of millennials (18-34 years old) are interested in buying a recreational property within the next 10 years. About a quarter of millennials already would consider buying a property as an investment to help finance their retirement.

Forty-four per cent would consider purchasing with a family member, 39 per cent would consider renting the property on a vacation rental site and 28 per cent would consider selling their current primary residence in the city to buy a recreational property.

What's the big attraction of recreational properties? Finding peace and quiet was the No. 1 answer for all Canadians, followed by spending time with nature, spending time with family and having a place where they can relax after a busy work week.

"The lifestyle of a home surrounded by the striking beauty of lakes, forests or mountains enjoyed with loved ones is an irreplaceable experience and one that remains part of the Canadian dream for many," says Somers.

Royal LePage says lifestyle and vacationing is by far the largest motivation for buyers, followed by retirement, being "a point of financial security" and purchasing a property for investment.

The main reasons for selling a recreational property are because the owners are getting older, the property is going unused and the owners are no longer able to keep up with the maintenance.

With most markets "witnessing healthy increases in both sales activity and pricing" in the first half of 2017, Somers says, "Looking ahead, we expect this trend to continue for the remainder of the year, as warmer weather heats the market, constraining inventory levels across the country."

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Jim Adair

Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at jim@remonline.com.

www.remonline.com/

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