Recreational property sales have bounced back after a slow start to the sales season with increased activity seen across much of Canada.
In its annual Recreational Property Report, Re/Max said the modest start of the season was caused by the late arrival of spring and frigid winter experienced in many markets across the country.
Photo: James Wheeler/Flickr
While local markets have varied in terms of sales volume and pricing, some broad national trends have emerged, Re/Max said in the report.
First, the two groups of buyers driving property sales in Canada are families with younger children and near or recent retirees. Re/Max said the families with younger children have built up equity in their primary residence and use that money to purchase a recreational property while retirees plan on using it as their primary summer residence and “launching pad” for winter travel.
Another trend is the “residential spillover” caused by the country’s active residential real estate markets in urban centres. Price appreciation on homeowners’ primary residences in big cities has allowed them to purchase a second home for recreational use. The second homes is typically within two hours driving distance of the urban centre where the owner’s primary residence is located.
Re/Max has also been monitoring the impact of the Canada Mortgage and Housing Corporation’s (CMHC) decision to discontinue their mortgage insurance product for second homes announced earlier this year. According to the brokerage, the change has had “little to no material impact” on the recreation property market.
Below are some regional highlights included in the report:
- Local brokers and agents expect sales volume and price in markets in Ontario to match or reach levels slightly above 2013′s.
- Buyers can expect a starting price of around $300,000 for an entry-level waterfront property in the Kawartha Lakes region.
- In Muskoka and Georgian Bay communities, an entry-level cottages can be purchased for well under $400,000.
- Consumer confidence is high in these markets with some markets reporting the most activity seen since the recession.
- Re/Max said that a weaker Canadian dollar has kept buyers north of the border.
- Recreational properties in some BC markets saw price depreciation following the 2010 Vancouver Olympics, but now there is renewed confidence in BC’s market following last year’s modest price increases.