Jun 05, 2006
Canadian recreational property prices continue to increase in most markets across the country, as demand remains strong and inventory remains scarce. Tight market conditions are expected as current cottage owners plan to stay put and young professionals enter the market in droves, says Royal LePage in its 2006 Recreational Property Report.
The report includes a nationwide research poll of Canadian cottage owner and buyer attitudes and actions (conducted by Maritz Research) and a market analysis of recreational property prices, trends and activity in selected leisure markets across Canada.
The report says that while the average price of a standard waterfront, land access recreational property is $380,507, some of the more popular destinations -- such as Grand Bend, Honey Harbour, Georgian Bay, Wasaga Beach, the Muskokas, West Kawarthas, Cranbrook, Kelowna, Vernon, Okanogan and Fernie -- report sales in the range of $500,000 to more than $1 million. The average price for a chalet is $413,694. Comparatively the national average price of a standard two-storey home is $340,956, says the company.
The report says although prices are high, 24 per cent of those planning to purchase are willing to spend more on their recreational property than on their primary residence. Over half of this group would spend from $50,000 to $150,000 more on a recreational property and 14 per cent would spend over $150,000 more on a recreational property.
“Escalating recreational property prices are evident in the majority of markets across the country, and do not show signs of decreasing in the near future,” says Phil Soper, president and CEO, Royal LePage. “The rising prices are not surprising given the fact that there is a convergence of buyers entering the market – with urban professionals, young families and baby boomers all vying for properties with similar features.
“Interestingly, the poll demonstrated that almost 20 per cent of people planning or considering buying a recreational property plan to pay in cash.”
The report says that while 35 per cent of people planning and those who would consider buying a cottage have budgeted approximately $100,000 to $300,000 for their recreational property, only five per cent of those planning to buy have budgeted $300,000 to $500,000 – the range encompassing the average cottage.
The study found that 78 per cent of Canadians who are likely to or are planning to purchase a recreational property in the next three years are under 49 years of age. But the report says the search for a recreational property may prove rather difficult this year because only 15 per cent of cottage owners reported that they are likely to sell their property within the next three years, limiting the amount of resale recreational properties coming onto the market.
Additionally, almost 60 per cent of cottage owners plan to will their cottages to family.
The top three most important features of a recreational property: waterfront, a lot with mature trees for privacy, and a large dock on the water.