Canada's two largest real estate companies issued reports about recreational properties this week, and while bargains can still be found for those willing to travel and buy seasonal properties, prices are climbing in most parts of the country.

The 2007 Re/Max Recreational Property Report says starting prices for waterfront properties are more than $500,000 in 31 per cent of the recreational property markets, and that only seven markets offer waterfront properties starting at less than $250,000.

Re/Max says aging baby boomers, which represent about one-third of Canada's population and control 45 per cent of its wealth, are driving the recreational property market. Some are preparing for their retirement years, while others are looking for a second home in which to spend time with family and friends.

"Baby boomers are investing in the future -- both from a lifestyle perspective and an economic standpoint," says Eldon Ash, regional director at Re/Max of Western Canada. "Tremendous equity gains have been realized in recent years as demand for recreational properties across the country swells. Given the aging of the population, this trend is expected to continue for at least the next five to 10 years as baby boomers move through the cycle."

A Royal LePage report lists some of the hottest cottage areas in Canada, including the Moore Point area in Ontario, where cottages cost up to $3 million; Chester, N.S., which has top-end properties for $1.5 million; and Okanagan Lake in Kelowna, B.C, where small waterfront condos start at $500,000 and year-round waterfront properties range from $1 million to $5 million.

Royal LePage says the big attraction in Kelowna is the recreational lifestyle and the climate. "For example, in April you can ski in the morning, golf in the afternoon and be cruising in your boat at the early evening -- all in the same day," says the report.

"It's been said that money made in stocks and bonds typically works its way into real estate," says Michael Polzler, executive vice-president for Re/Max Ontario -- Atlantic Canada. "This year is a prime example, as economic performance and stock market profits have propped up activity in most Canadian markets. The boomer attitude is go big or stay home."

Re/Max says that some of the other most expensive markets include Invermere, B.C., starting at $2.5 million; Whistler, B.C. at $1.1 million; the Bala and Port Carling areas in Ontario's cottage country, starting at $500,000; and the Port Elgin/Kincardine/Goderich area of Ontario, starting at $400,000.

The report says that purchasers who can't afford the most popular areas are opting for smaller lakes and riverfront properties. Timeshare and fractional ownership projects are also gaining in popularity, and even land-lease properties are garnering attention, says Re/Max.

Another reason why Canada's cottage markets are booming is because of an influx of purchasers from the United States, Europe, and Australia. Forty-six per cent of the markets surveyed have foreign investors buying there.

"Compared to similar properties in the U.S. and overseas, we are extremely competitive," says Polzler. "In coveted recreational property areas throughout the U.S., waterfront prices in the double-digit million-dollar range are quite commonplace."

So where are the bargains? Royal LePage lists George's Lake, Newfoundland, on the western part of the province and a 20-minute drive from Cornerbrook, as "the ideal spot for cottage goers seeking affordable waterfront property. Prices range from $75,000 to $90,000 for a seasonal 50-year-old waterfront cottage."

Molega Lake in Nova Scotia offers cottages in the $120,000 to $140,000 range. For that you can get a standard two-bedroom waterfront cottage on an acre of land. The lake is 90 minutes from Halifax.

In Quebec, your best bet is Lake Selby, an hour's drive from Montreal, which offers a 1,000 sq. ft. waterfront cottage for $250,000. Large motorized water vehicles are not allowed on the lake.

In the Rideau Lakes area of Ontario, $150,000 to $250,000 will get a 1,000 sq. ft. waterfront cottage, one hour from Ottawa. Royal LePage says some islands in the Honey Harbour area are also available at $250,000. "Typically, the most affordable cottages feature 100 feet of waterfront, are usually quite rustic and are non-winterized," says the company.

Starting prices across Manitoba, Saskatchewan and Alberta are around $250,000. In B.C., Royal LePage says the best bargain is at Stack Lakes, in the Bridge Lake area, where properties start in the $200,000 to $250,000 range.

"Limited inventory levels have contributed to the upswing in starting prices in 54 per cent of recreational property markets this year," says Ash. "Despite upward pressure, purchasers remain grounded when it comes to buying recreational properties. Very few purchasers are willing to spend more than fair market value."