Balance returns to recreational property markets
across Canada this year, says RE/MAX
Mississauga, ON (June 10, 2008) --
After an extended period of extraordinary growth, more balanced
market conditions have emerged in recreational property markets across the country, according to a report
released today by RE/MAX.
The RE/MAX Recreational Property Report found that a substantial increase in the supply of recreational
properties listed for sale, combined with fewer buyers overall, characterized most recreational markets
this year. Of the 45 markets surveyed, 91 per cent (or 41 markets) were in the transition stage, moving
from strong sellers into balanced market conditions. The only exceptions were Salt Spring Island, two
markets in Saskatchewan—Last Mountain Lake and Qu'Appelle Lakes and Lakes Candle, Emma, and
Waskesiu -- and Newfoundland's East Coast —where inventory levels were relatively low. Affordability
was a primary factor in 35 per cent of markets surveyed, given serious upward pressure on recreational
values in recent years.
"Market conditions have shifted, but don't expect to see bargain basement prices or fire sales," says
Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.
"The recreational market continues to experience solid demand -- a trend that is expected to continue
throughout 2008. The influx of new listings has yet to translate into downward pressure on recreational
property prices. Prime waterfront properties, while more plentiful than in year's past, will still command
top dollar."
Adverse winter weather conditions during the first four months of the year hindered recreational activity.
Sixty-seven per cent of markets reported softening in the number of sales year-to-date, while average
prices remained stable or experienced moderate increases over 2007 levels for the same period. Economic
concerns, fueled by negative GDP growth in the first quarter and soaring energy costs, have also played a
role in the transitioning market.
"We're coming off the longest period of economic expansion since World War II," says Elton Ash,
Regional Executive Vice President, RE/MAX of Western Canada. "Recreational property values have
appreciated beyond our wildest dreams across the country. More balanced market conditions are a
welcome change for purchasers."
- more -
RE/MAX Recreational Property Report…2
For the first time in many years, in fact, a good selection of entry-level waterfront is available in markets
across the country. Eighteen per cent of those surveyed offer properties under the $200,000 price point,
including; Central South Cariboo in British Columbia; Parry Sound, East Kawarthas and Kingston in
Ontario; Summerside, PEI; South Shore, Nova Scotia; Shediac, New Brunswick; and the East Coast of
Newfoundland.
Recreational property buyers also found themselves divided between two borders this year. The housing
market meltdown in the US combined with a Canadian dollar at par created serious investment
opportunities for secondary properties in Florida, Arizona, Texas, and California. Some of those very
same factors have spurred American recreational property owners in Canada to list their properties for
sale, with many looking to take advantage of ideal market conditions here.
"Many Canadians are capitalizing on market conditions in major American centres," says Polzler. "For
some purchasers, the move is strictly a short-term investment strategy with a pay-off at the end of the day,
while for others, retirement is the main objective."
The report also found that younger buyers were a factor in 40 per cent of recreational markets surveyed.
"Baby boomers are clearly not the only purchasers that appreciate the recreational lifestyle," says Ash.
"Generation X is quickly becoming a force in the marketplace, spurring demand for condominium
product on ski hills, oceanfront properties in good surf locales, and water frontage on trendy lakes with
celebrity residents."
Other highlights
:
Alberta's red-hot economy has helped boost recreational property markets in British Columbia,
Atlantic Canada, and some parts of Ontario.
Affordability is prompting buyers to consider back lots, riverfront, condominiums, hobby farms
and leased land.
Some purchasers looking to secure an exit strategy are buying recreational properties or
secondary homes in residential neighbourhoods in close proximity to the water's edge.
RE/MAX is Canada's leading real estate organization with over 18,000 sales associates in more than 656
independently-owned and operated offices. The RE/MAX franchise network is a global real estate
system operating in over 65 countries. More than 7,000 independently-owned offices engage over
110,000 member sales associates who lead the industry in professional designations, experience and
production while providing real estate services
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
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RE/MAX Realty Specialists Inc.
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