Boomer attitude is "go big or stay home"
MISSISSAUGA, ON, May 1 /CNW/ - Luxury recreational property sales are set
to soar in coming months as affluent baby boomers drive demand for upscale
product from coast-to-coast, according to a report released today by RE/MAX.
The 2007 RE/MAX Recreational Property Report found the top-end of the
market stands to gain most from the aging baby boom demographic, as many
prepare for their retirement years. Teardowns, custom-builds, and renovation
continue unabated as a result, changing the shoreline of lakes and rivers in
34 of the 39 markets surveyed from Newfoundland/Labrador to British Columbia.
Upper-end sales have also affected recreational property values across the
board, placing upward pressure on prices, particularly in Western Canada.
Starting prices have topped $500,000 in 31 per cent of recreational property
markets. Only seven offer waterfront properties under the $250,000 price
point.
"It's been said that money made in stocks and bonds typically works its
way into real estate," says Michael Polzler, Executive Vice President and
Regional Director, RE/MAX Ontario-Atlantic Canada. "This year is a prime
example, as economic performance and stock market profits have propped up
activity in most Canadian markets. The boomer attitude is go big or stay
home."
Boomers - born between 1946 and 1965 - currently represent about
one-third of Canada's population and control approximately 45 per cent of its
wealth. They own $230 billion in real estate assets and have a net worth of
$530 billion. While many boomers have retirement in mind, others are looking
for a second home where they can spend quality time with their families and
friends. Although the investment aspect is secondary, it still plays an
important role in the decision to purchase a recreational property, be it a
lakefront cottage, a hobby farm with acreage, or an oceanfront condominium.
"Baby boomers are investing in the future - from both a lifestyle
perspective and an economic standpoint," says Elton Ash, Regional Director,
RE/MAX of Western Canada. "Tremendous equity gains have been realized in
recent years as demand for recreational properties across the country swells.
Given the aging of the population, this trend is expected to continue for at
least the next five to 10 years as baby boomers move through the cycle."
While building the dream clearly appeals to a broad range of purchasers,
realizing ownership is becoming increasingly difficult. Affordability is
top-of-mind in many markets. Purchasers without the financial wherewithal to
ante up are considering smaller lakes and riverfront properties, as well as
timeshares and fractional ownership. Even land-leased properties are garnering
attention.
Atlantic Canada continues to offer up the best bang for the buck, with
the Eastern Coastline, NL at $75,000, Greater Moncton Area, NB at $80,000, and
South Shore, Lunenburg County, NS at $225,000. In Ontario, Parry Sound, Elliot
Lake, and Combermere attract price-conscious buyers staring from $200,000,
$150,000 and $190,000 respectively. In the West, great value can be found at
Lake Winnipeg, MB from $200,000 as well as the Central South Cariboo in BC
from $275,000. The most expensive markets in the country, located in British
Columbia, Alberta and Ontario, are as follows: Invermere starting at
$2.5 million; Kelowna at $2 million; Salt Spring Island at $1.5 million;
Whistler at $1.1 million; Sylvan Lake and Penticton at $1 million; North
Okanagan/Shuswap at $900,000; Comox Valley - Mt. Washington and Fraser Valley
(Cultus Lake, Harrison Lake) at $800,000; Wasaga Beachfront at $700,000;
Midland at $550,000; Bala, Port Carling at $500,000 to $550,000; and Honey
Harbour/ Port Severn, Orillia/Lake Couchiching and Port
Elgin/Kincardine/Goderich at $400,000.
"Limited inventory levels have contributed to the upswing in starting
prices in 54 per cent of recreational property markets this year," says Ash.
"Despite upward pressure, purchasers remain grounded when it comes to buying
recreational properties. Very few purchasers are willing to spend more than
fair market value."
Forty-six per cent of markets have seen exponential growth in recent
years, thanks to an influx of purchasers from other parts of the country, as
well as the U.S., Europe, and Australia. Canadian recreational property
markets are considered undervalued and world-class - and as such, represent an
incredible opportunity for international investors.
"Compared to similar properties in the U.S. and overseas, we are
extremely competitive," says Polzler. "In coveted recreational property areas
throughout the U.S., waterfront prices in the double-digit million-dollar
range are quite commonplace."
To view the full 2007 RE/MAX Recreational Property Report, click here:
http://files.newswire.ca/348/FINALRec_Prop_Rpt2007.pdf
RE/MAX is Canada's leading real estate organization with over 17,000
sales associates situated throughout its more than 638 independently owned and
operated offices across the country. The RE/MAX franchise network, now in its
34th year of consecutive growth, is a global real estate system operating in
over 68 countries. More than 6,900 independently owned offices engage 121,000
member sales associates who lead the industry in professional designations,
experience and production while providing real estate services in residential,
commercial, referral, relocation and asset management. For more information,
visit: www.remax.ca.
For further information: Christine Martysiewicz, RE/MAX Ontario-Atlantic
Canada, (905) 542-2400; Eva Blay, Charlene McAdam, Kim Kofman, Point Blank
Communications, (416) 781-3911
