Extensive rain and some flooding hampered recreational property
sales out of the gate in 2013, impeding showings and dampening
overall enthusiasm. Yet, improved conditions in recent
weeks have bolstered intentions and the momentum is now in
line with last year’s levels. Three-hundred and eighty-six recreational
properties changed hands in the East Kawarthas over
the past 12-month period (May 2012 to April 2013), compared
to 388 during the same period one year earlier. While prices
have remained relatively stable, average price climbed slightly
to $369,000 from $357,000. Buyer confidence has been a factor
and affordability continues to bolster demand in the area.
Entry-level properties remain most coveted, with those listed
under $300,000 moving best. Given the recent trend toward
retirement living, many purchasers are willing to ante up
for turnkey, four-season properties. Renovation continues unabated,
as owners add square footage or enhance the quality
of existing cottage product. In traditional fashion, Buckhorn,
Pigeon and Chemong Lakes are drawing solid interest, with
cottages priced from $250,000 to $600,000 moving well. While
Stoney and Clear Lakes tend to host the East Kawarthas’ most
prestigious recreational getaways, the most expensive sale so far
this year was recorded at Mississauga Lake for $1.6 million.
The appeal?—clear water, good fishing and greater privacy.
Th e starting price for a typical, three-bedroom, winterized recreational
property on a standard one-third to a half-acre lot
remains unchanged at $300,000. Days on market has held up,
hovering around 90 days. Overall, the market for recreational
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Rising confidence levels, lower values, and favourable supply spark buyer enthusiasm
in Canadian recreational property markets, says RE/MAX
77 per cent of recreational markets reported stagnant starting prices or a year-over-year decline
Summer has finally arrived and its impact is evident on recreational property markets across the country. Greater stability is returning to this segment after several years of slow growth, with close to 70 per cent of markets expected to match or exceed 2012 sales by year-end.
With buyer enthusiasm climbing, many markets have experienced a rebound in activity in recent months.
The shift can be attributed to six major factors:
1. Confidence is growing in overall economic performance.
2. Selection of recreational product is at its best level in recent years.
3. Prices have softened in many Canadian markets.
4. Paper wealth accumulated in the stock market in recent years is making its way into recreational property markets.
5. Purchasers are bypassing tighter financing criteria through HELOCs (Home Equity Line of Credit) on their principle residence.
6. Increased foreign and out-of-province investment.
Signs of change have emerged in recreational hotspots nationwide. Deals are coming together with greater ease, with more buyers and sellers reported to be on the same page. Multiple offers have been noted in some Muskoka markets. Luxury sales have experienced an uptick in a number of recreational communities in Ontario, including Prince Edward County, Collingwood, Honey Harbour, Grand Bend, Haliburton, and Innisfil to Oro. Given the steady momentum of today’s market, there are indications that 2013 could emerge as the turning point—suggesting the window of greatest opportunity is likely drawing to a close.
Baby boomers continue to fuel the lion’s share of demand, securing properties for family enjoyment and/or with an eye to retirement down the road. More mature boomers are opting for existing and proposed residential development on the waterfront, offering all the comforts of home, but none of the upkeep. Ontario’s Huntsville and Midland/Penetang/Tiny/Tay are prime examples. Full-time living is on the upswing, and as a result, this demographic is fuelling the growing trend toward renovation.
Teardown activity has subsided in many markets as fewer ‘traditional cottages’ are listed for sale. The rising cost of construction—and added HST—has also served to increase the appeal of resale recreational cottages, second homes and chalets. There are some exceptions, as new builds continue unabated in some Ontario markets including Grand Bend, Bala/Port Carling, Midland, Innisfil to Oro, and throughout Eastern Ontario, as well as in Shediac Bay, New Brunswick and the Newfoundland Coast (East).
Value continues to be a key driver, with momentum strongest at the entry-level price points—between $250,000 and $500,000. With starting prices down or unchanged in 77 per cent (24/31) of markets examined in 2013, a great deal of opportunity exists for those ready to secure a recreational getaway. Regardless of the type of product or price point, it’s clear that favourable conditions and confidence have bolstered interest and intentions this year. The stage is set for a solid 2013 performance.