CABIN FEVER
NEXT GENERATION MOVING IN ON BABY BOOMERS WHEN IT COMES TO COTTAGE SALES.
A new survey out Thursday suggests baby boomers are being shoved aside by generation X when it comes to cottages, as the younger generation scoops up property with an eye on retirement.
Over the last month, real estate firm Royal LePage did a cross- Canada survey of 49 of its real estate advisers who specialize in recreational property sales to get a sense of who is buying those properties. It found those aged 36 to 51 outnumber those aged 52 to 70 nearly two- toone when it comes to buying cottages, cabins and chalets across the country.
The same survey found that 65 per cent of the brokers says clients cited retirement needs as part of the reason for buying, while 88 per cent said it was about lifestyle and vacations.
“We found it i nteresting that a majority of respondents identified retirement as a driving factor for a recreational property purchase consideration, but Gen Xers, still decades from retirement, were identified as the typical buyer in the cur- rent market,” said Phil Soper, chief executive Royal LePage, in a statement. “This cohort, having reached a place of stability, and often owners of primary residences in the country’s city centres, is making recreational property purchases for family enjoyment in the near- term and as a key strategy for retirement.”
The survey of Royal Le- Page advisers found 63 per cent of those polled said generation X buyers were the No. 1 cohort, while 33 per cent said they mainly sold to baby boomers.
As a retirement strategy, cottages don’t come cheap. In British Columbia, the average price for vacation properties in Kelowna is now $1.6 million for lakefront property, the highest in the province for something on the water. In Ontario, the most expensive region was South Georgian Bay, where the average lakefront property is now $845,000.
There are cheaper alternatives. Prince Edward Island offers the cheapest oceanfront properties, with an average price of $ 150,000. The cheapest lakefront properties are in New Brunswick, with an average price of $ 97,000. Even in British Columbia, you can head to the Sunshine Coast and find lakefront property that averages $500,000, or oceanfront averaging $800,000.
Although the low, low interest rate environment is providing buyers with confidence to go ahead with a transaction, Soper said the market is not being fuelled by debt.
“In contrast to urban home purchase decisions, buying a property on a lakefront or mountainside is much less about interest rates, and more about enhancing lifestyle. Cash savings trump mortgage financing when it comes to how people are acquiring recreational property,” he said.
So far, it doesn’t appear that foreign buyers are having a huge impact on the market. And even the ones who are buying are coming from south of the border, as opposed to overseas.
The survey found that 95 per cent of brokers believe 10 per cent of recreational property purchases are being made by foreigners with 64 per cent of those who specified a country of origin for a foreign purchaser identifying the buyer as American.
“Canadians have been, for years, the principal foreign buyers of sunbelt property in states like Florida and Arizona, while a lower Canadian dollar has encouraged a new wave of U. S. buyers here,” Soper said.
CLIENTS CITED RETIREMENT AS PART OF THE REASON FOR BUYING.