As real estate prices remain high in Canada’s urban centres, young families are looking for unique ways to finance their dreams of recreational property ownership. In a recent survey conducted by Leger, more than a quarter (28 per cent) of Canadians with children under the age of 18 indicated they would consider selling their primary residence in the city in which they live in order to purchase a cottage, cabin or ski chalet. Other options that these potential buyers are willing to consider include fractional ownership in a shared property, purchasing a recreational property with a friend or family member, and renting out the recreational property they purchase on a vacation rental website such as AirBnB.
In a separate survey of RE/MAX brokers and agents, 73 per cent of regions indicated that young families with children were a key driver of demand in their market, including established recreational regions such as the Okanagan Valley in B.C., Canmore, AB, Collingwood, ON and the Laurentians in Quebec. Retirees were also a key driver of demand across Canada, with more than half (55 per cent) of regions surveyed reporting an increase in retiree buyers this year compared to last year.
Continued high real estate prices in regions like Toronto and Vancouver have led to large numbers of retirees and Baby Boomers nearing retirement to sell their homes and put the equity they received from the sale into the purchase of a recreational property. This has in turn resulted in the price appreciation that we’ve seen in popular recreational property markets such as Whistler in B.C. and Haliburton in Ontario.
The RE/MAX survey of brokers and agents found that 39 per cent of regions experienced an increase in demand from buyers leaving either the GTA or B.C.’s Lower Mainland compared to last year. More local markets such as Salt Spring Island, located a few hours away from Vancouver and the Kawarthas in Ontario, experienced significant increases in demand as a result of this trend. Regions as far away as Ottawa’s Rideau Lakes Region and P.E.I’s north and south shore also received a boost from buyers leaving the GTA who are looking for great value on properties further out from the Greater Golden Horseshoe.
In Leger’s survey of Canadians, almost two-thirds (65 per cent) of millennials (18-34 years old) expressed interest in purchasing a cottage, cabin or ski chalet in the next 10 years. A quarter of respondents also indicated they would consider purchasing a recreational property as an investment vehicle to help finance retirement. At the same time however, many millennials feel that high real estate prices in the city in which they live will negatively impact their ability to buy a recreational property in addition to owning a primary residence.
To overcome this gap between demand and affordability, many Canadian millennials are willing to turn to unique financing methods to help purchase a recreational property. Nearly half (44 per cent) of millennials said they would purchase a property with a family member, while 39 per cent would purchase a property and rent it out using a vacation rental site such as AirBnB. Additionally, over a quarter of young Canadians (age 18-34) said they would consider selling the primary residence in which they live, while one in five millennials said they would consider both fractional ownership of a shared a property or buying with a friend.