According to a recent report released by RE/MAX, Canadians are seeing greater stability in returning to recreational markets. If you’re been thinking about purchasing cottage/resort property – the time is now!
In case you’re wondering, the shift can be attributed to six major factors:
Confidence is growing in overall economic performance.
Selection of recreational product is at its best level in recent years.
Prices have softened in many Canadian markets.
Paper wealth accumulated in the stock market in recent years is making its way into recreational property markets.
Purchasers are bypassing tighter financing criteria through HELOCs (Home Equity Line of Credit) on their principle residence.
The annual RE/MAX Recreational Property Report was published on June 18th and in a nutshell, cottage sales are booming. Sales are up in 70 percent of Canadian markets as Canadian confidence is rebounding with softer values and increased selection as motivating factors. Enjoy these highlights!
Sales are up in 70 per cent of Canadian markets while 6 per cent were on par with last year.
Affordability is a key driver with rising inventory and low interest rates. The upper limit of what most in the market are willing to spend is $400,000.
Prices remain soft with a downward trend in starting prices reported in 49 per cent of markets, 33 per cent remained the same and 19 per cent saw an increase in starting values year-over-year.
Ontario cottage sales are strong; 71 per cent of markets included in the study reported sales on par or ahead of last year’s figures.
Prices have stayed firm or dropped for the same period last year in 71 per cent of cottage markets analyzed.
Five markets reported lower sales compared to last year however, of the five, three markets- Prince Edward County, Haliburton and Huntsville/Lake of Bays fell short by only three, seven and 12 sales respectively and are expected to catch up by the end of the season.
Conditions favour buyers due to ample supply although some shortages exist for entry level properties.
A new generation of buyers, young couples with children, have entered the cottage market and they’re price sensitive waiting for the right property to come along and willing to travel further just off the water for a better price.
In the popular market of Huntsville, Lake of Bays limited supply of waterfront properties is reflected in softer sales while multiple offers are occurring for the first time in years for cottages priced at $400,000 and under. Huntsville’s starting price for a three-bedroom, winterized recreational property on a standard-sized waterfront lot is $300,000 with the most expensive waterfront property sale on MLS this year was priced at $1.87 million.
Orillia has seen strong activity with waterfront sales climbed 54 per cent year-to-date, rising from 35 sales one year ago to 54 in the first four months of 2012.
In the luxury market of Bala/Port Carling starting prices for a three-bedroom, winterized recreational property on a standard-sized waterfront lot is $650,000. In this market, prices have held steady or experienced modest appreciation. Demand in Bala/Port Carling has been strong at all price points including the upper end where six waterfront properties sold at over $2 million during the first four months of the year.
Cheers to a great summer at the cottage. Read the entire RE/MAX Recreational Property Report 2012.