Tue, 15 May 07
With Baby Boomers on the hunt for luxury properties, there's still room for cottage purchasers on a tight budget to own a slice of Canadian paradise...
Luxury recreational property sales are set to soar in coming months as affluent baby boomers drive demand from coast-to-coast, the 2007 RE/MAX Recreational Property Report says.
The report found the top end of the market stands to gain most from the aging baby boom demographic, as many prepare for their retirement years.
The demand has put pressure on prices, particularly in Western Canada, with starting prices topping $500,000 in 31% of recreational property markets studied, Re/Max said.
"Baby boomers are investing in the future, from both a lifestyle perspective and an economic standpoint," said Elton Ash, regional director, 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."
‘Go big or stay home’
Boomers, born between 1946 and 1965, represent about one-third of Canada's population and control approximately 45% of its wealth.
"It's been said that money made in stocks and bonds typically works its way into real estate," says Michael Polzler, executive vice-president and regional director, 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."
Also released Tuesday, Royal LePage's 2007 Cottage Country Snapshot highlighted 10 "hidden gem" areas where properties can be found for $250,000 or less, as well as 10 "hot spots" for those with unlimited budgets.
"With the summer recreational season fast approaching, Canadians are turning their attention dockside," said Phil Soper, president and CEO, Royal LePage Real Estate Services. "The eastern provinces offer the most affordable waterfront properties, while recreational properties in Central and Western Canada are priced higher, reflecting their proximity to larger urban centres."
‘Best bang for the buck’
The Re/Max report agreed that "affordability is top-of-mind in many markets."
"Purchasers without the financial wherewithal to ante up are considering smaller lakes and riverfront properties, as well as timeshares and fractional ownership. Even land-leased properties are garnering attention," the Re/Max report said, adding Atlantic Canada "continues to offer up the best bang for the buck."
The most expensive markets in the country are in British Columbia, Alberta and Ontario, Re/Max said.
Forty-six per cent of markets have seen exponential growth in recent years, the Re/Max report said, thanks to an influx of purchasers from other parts of the country, as well as the U.S., Europe, and Australia. "Canadian recreational property markets are considered undervalued and world class and represent an incredible opportunity for international investors," the report concluded.
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