Buyers seeking better lifestyle
Attitudes gauged in survey
For almost half of Canadians in a national survey, buying a recreation property is about lifestyle.
Their desire to improve their lifestyle by buying an escape destination comes despite concerns about increasing taxes, rising interest rates and new regulations that require higher down payments on second homes, says an Angus Reid survey.
Canadian attitudes toward recreation property ownership were recently gauged in the survey, which was commissioned by Royal LePage Real Estate Services.
When buyers were asked why they plan to purchase recreation property, lifestyle was the number-one reason given at 47 per cent.
Only one in four buyers say new Canada Mortgage and Housing Corp. regulations reduce their desire or ability to purchase a recreation property.
The changes will require Canadians to pay a minimum 20 per cent down payment on any residential or recreation property they buy that is not their primary home.
Canadians are more concerned about increases in taxation affecting their ability to buy vacation properties — with 49 per cent responding that they are concerned about things such as new taxation rules such as B.C.’s HST (Harmonized Sales Tax) on new homes.
Forty-six per cent expressed concern about increasing property taxes.
Twenty-six per cent of those surveyed want to purchase a recreation property before interest rates start to rise, while 10 per cent said a hike in interest rates would stop them from purchasing.
“Canadians are generally confident about buying recreation properties because they see a payoff in terms of improved quality of life,” says Phil Soper, president and chief executive of Royal LePage Real Estate Services.
“The survey results show that tightening of lending requirements for second homes, coupled with an increase in taxes and expectations of higher interest rates, may have a dampening effect on the recreational property market. However, there continues to be strong demand for second homes and Canadians appear prepared to make significant investments in order to enjoy their leisure time.”
Forty-three per cent of respondents said they would buy a vacation property because it is a good investment — down from 64 per cent in a comparable Royal LePage survey conducted in 2009.
“Fewer people are looking to acquire recreation property for its investment value this year, a direct result of rising cottage prices,” says Soper. “The brave bargain hunters who purchased during the depths of the 2008-2009 recession have been rewarded by appreciating prices this year.”
One-third of respondents in the 2010 survey said they will not have to make any financial or lifestyle changes in order to afford a recreation property.
Twenty-five per cent said they plan to rent out their recreation property for part of the year (up from 13 per cent in 2009).
Only 15 per cent plan to purchase a vacation home with friends or family.
The survey was commissioned as part of the 2010 Royal LePage Recreational Property Report, an annual market analysis of prices, trends and activity in selected leisure markets across the country.
Canadian attitudes toward recreation property ownership were recently gauged in a survey commissioned by Royal LePage Real Estate Services.