Retirees are competing with young families for the right to summer in cottage country, according to a new report.
In Ontario, the battle is especially intense thanks to low inventory levels, which pushed prices for a single-family home up 7.2 per cent to $393,253 this spring compared to the previous year, according to a new report by Royal Le Page Thursday.
“With the youngest baby boomers a decade away from retirement, and their older peers well on their way, we are seeing robust demand for cottage, cabin and chalet-style retirement properties,” said Phil Soper, chief executive officer of Royal LePage in a press release.
But sales fell in the province 7.9 per cent primarily due to the low housing stock.
“In Muskoka, we are seeing people in their 50s and 60s cashing out with significant amounts of money, as well as those who are coming into money and want to get out of the rat race,” said Bob Clarke, sales representative, Royal LePage Lakes of Muskoka.
The real estate brokerage expects prices in the province’s recreational regions to rise a further 8 per cent over the next twelve months to $424,905, despite fears of flooding and wet weather.
The landscape is different at the other end of the country in British Columbia where prices were virtually flat and sales fell 22.5 per cent compared to the previous year.
The downturn in the province’s residential market has spilled over to the recreational market, while lacklustre economic activity in its key source markets of Alberta and Saskatchewan also contributed to the slowdown.
“While sales are down, buyers from Alberta, Saskatchewan, and Vancouver are still active in the Okanagan region,” stated Mark Walker, sales representative, Royal LePage Kelowna. “Despite a slowdown in the Alberta economy, there are some positives that help offset the challenges we see.
Alberta saw a price increase of 10.2 per cent, mostly due to an 11.4 per cent increase in the Canmore region.
Recreational property regions in the Prairies decreased in both price and sales, with 6.3 per cent and 3.4 per cent respectively. Royal LePage cites the region’s softer economy as the primary driver for this downturn.
Overall, recreational property prices in Canada have grown 5 per cent by spring compared to the previous year, to an average price of $411,471.
However, every province except Quebec saw a decrease in sales, where spring flooding did little to dent sales activity rising 6.3 per cent during the period. Royal LePage attributes the increase to the province’s low unemployment rate, which sat below 5 per cent for the first time since 1976.
“We are also noticing a surge of buyers between the ages of 40 and 60 looking to enjoy the cottage lifestyle and spend more time with the family,” said Dominic St-Pierre, vice president and general manager, Royal LePage, for the Quebec region.
Atlantic Canada and particularly Halifax remain cheapest, with a 5.9 per cent price increase and an aggregate price of 257,965. The real estate agency predicts only a 0.7 per cent price increase next year.
Adil Dinani, real estate advisor at LePage, sees changing interest rates as potential catalysts for the market.
“Oxygen for any real estate market is low interest rates. They generally boost consumer confidence,” said Dinani. “And people are more likely to get into the market if they have the financial capacity to do so.”
He also predicts a shortage of buyers in the higher end of the market, typically homes over $2 million, while the lower and middle ends of the recreational market will stabilize.
To conduct the study, Royal LePage polled 48 realtors and brokers specialized in recreational homes, who in turn collected data such as median prices and unit sales for their respective regions.
-Calgary Herald/ Nicholas Sokic