Buyers Seize Opportunities in Flourishing Recreational Property Market

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Jun 04, 2015, 06:00 ET

2015 Recreational Property Report from Royal LePage shows stronger demand nationwide

TORONTO, June 4, 2015 /CNW/ - For the second consecutive year, the recreational property market got off to a slow start in 2015, as harsh weather delayed sales activity in most regions until well into the spring buying season. Brokerages and agents that specialize in cottage, cabin or chalet properties are now experiencing a rush of activity as buyers make up for lost time, according to the 2015 Royal LePage Recreational Property Report released today. Unlike 2014, when the extended winter dampened total sales volumes, increased activity levels in mid to late spring 2015 show that buyers had merely delayed purchase decisions this year versus putting them off entirely. The exception to this is in Alberta, some border areas of eastern B.C. that cater to Albertans, and in Newfoundland, where a depressed energy sector has reduced activity levels and put downward pressure on prices.

The Royal LePage Recreational Property Report compiles information from a cross-Canada survey of brokers and agents who specialize in the recreational real estate market. Advisors across the country are reporting a surge of interest from buyers who have already absorbed a good deal of the available inventory, including many listings that sat unsold last year. In spite of another long winter, buyers have come out in droves in late spring, encouraged by asking prices that have remained relatively flat, year over year. However, brokers warn that prices could begin to climb again as new inventory has not kept up with sales volumes.

"The dream of recreational property ownership is very much alive and well across the country," observed Phil Soper, president and chief executive of Royal LePage. "Dominated primarily by buyers in their 40s and 50s with families, these are people who are seeking to re-create the idyllic weekends and summers of their youth. Looking ahead, many see their current weekend getaway as a future full-time residence, both as a base for 'work from home' arrangements as they become empty-nesters, and onward into retirement."

"Today's low interest rate environment has supported discretionary, aspirational purchases in a number of sectors," continued Soper. "Our agents that serve the urban luxury home market have been extremely busy this year. Further, adult Canadians have accumulated considerable wealth. They are buying luxury automobiles and products like expensive smartwatches in record numbers. While a cottage is clearly a non-essential purchase, in many ways it's less selfish, as the benefits of a country get-away accrue to the entire family."

"In a roundabout way, the fall in oil prices is supporting the recreational property market this year," concluded Soper. "Cheaper gasoline makes the prospect of a weekend commute to the lake a more affordable proposition. And cheap oil means a lower Canadian dollar, which has more people looking at Muskoka, Tremblant and the B.C. interior and fewer casting covetous glances at Florida and Arizona. We are even seeing money making its way north, particularly in British Columbia, Alberta and Atlantic Canada, as the strong U.S. currency has increased American buying power."

The 2015 report shows that all property types have experienced a strong start to the recreational property buying season. Consistent with previous years, the demand for waterfront properties continues to produce the greatest price appreciation. Experienced agents are quick to point out that waterfront is finite and there is only so much property to go around.

While each community has its own unique characteristics, the brokers and agents who specialize in the sector agree fully on one important factor when searching for a recreational property: the need to do your homework before purchasing. From understanding shorelines to septic systems, owning a cottage is a different proposition to that of a city property. Each region has its own regulations that cover renovations; your ability to rent the property to others; and environmental obligations. While banks will provide financing to purchase a second residence, the requirements and loan terms will be different. It is highly recommended that buyers take their time to assess what is most important to them, from commute times to sun exposure to affordability. To do all this, it is essential to engage an agent that specializes in the local recreational property market who can walk buyers through the complex process.

The Royal LePage Recreational Property Report is an annual market analysis of recreational property prices, trends and activity in select leisure markets across the country and the full report can be found here.

The chart below shows the price range for standard recreational properties across Canada in 2015.

Area	Standard Recreational Property
	Waterfront: Access by land	Waterfront: Access by water	Inland
Prince Edward Island	130,000 – 350,000	N/A	75,000 – 150,000
Newfoundland	150,000	200,000	100,000
Nova Scotia	405,000	300,000	180,000
New Brunswick
Fredericton	116,700	N/A	105,800 – 116,000
Perth & Rowena on Tobique River	200,000 – 400,000	N/A	100,000 – 150,000
Southeast New Brunswick	150,000	150,000	150,000
Québec
Eastern Townships	700,000	N/A	300,000
Lanaudière	250,000	N/A	125,000
Memphremagog	250,000 – 500,000	150,000 – 300,000	N/A
Mont-Tremblant	500,000 – 1,500,000	500,000 – 1,000,000	225,000 – 350,000
Ontario
Blind River	200,000	150,000	150,000
Bruce Peninsula	275,000 – 450,000	N/A	150,000 – 200,000
East Kawarthas	450,000	350,000	300,000
Haliburton Highlands	350,000	200,000	150,000
Honey Harbour	500,000	300,000	N/A
Kawartha Lakes	370,000	250,000	170,000
Land O' Lakes	315,000	190,000	131,000
Meaford, Thornbury & Collingwood	416,000	N/A	474,000
Muskoka	540,000 – 700,000	390,000 – 450,000	175,000 – 210,000
Niagara-on-the-Lake	600,000	N/A	450,000
Orillia & South Muskoka	530,000	300,000	200,000
Parry Sound	350,000 – 450,000	300,000 – 400,000	275,000 – 350,000
Rideau Lake	265,000 – 450,000	175,000 – 350,000	150,000 – 200,000
St. Joseph Island & Lake Huron	175,000	150,000	125,000
Southwestern Ontario	280,000 – 1,400,000	N/A	168,000 – 750,000
Sudbury	200,000	160,000	100,000
Manitoba
Interlake Area – Lake Winnipeg	215,000	N/A	107,000
Grand Beach District	200,000	220,000	150,000
Lac du Bonnet	290,000	N/A	150,000
Lake Manitoba	175,000	199,000	155,000
Lake Winnipeg	260,000	N/A	100,000
Saskatchewan
Christopher & Candle Lake	420,000	N/A	210,000
Regina	300,000	N/A	130,000
Alberta
Canmore	1,000,000 – 2,000,000	N/A	650,000 – 1,000,000
Glennifer Lake & Pine Lake	370,000	N/A	310,000
Pigeon Lake	379,000 – 1,490,000	N/A	179,000 – 499,000
Sylvan Lake	1,000,000	N/A	350,000 – 500,000
Wabamun Lake & Lac St. Anne	280,000	525,000	225,000
British Columbia
100 Mile House – South Cariboo	260,000	N/A	100,000
Cranbrook, Sparwood, Kimberly, Fernie	800,000	400,000	300,000
Gulf Islands	100,000	35,000	50,000
Kelowna	1,000,000	300,000	300,000
Rathtrevor Beach & Horne Lake	154,000 – 270,000	280,000	244,000
Vernon	1,000,000	N/A	650,000

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of over 16,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence.
Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

For more information visit: www.royallepage.ca.

SOURCE Royal LePage Limited