Canadians Interested in Recreational Property Feel Added Urgency to Leap While Rates Are Lowhttp://www-c.royallepage.ca/news/canadians-interested-in-recreational-property-feel-added-urgency-to-leap-while-rates-are-low/
Consumers maintain optimism regarding Canadian recreational property market, according to Royal LePage survey
TORONTO, MAY 16 - According to a new survey released today by Royal LePage, interest rates factor hugely into the decisions of Canadian households when it comes to purchasing a recreational property.
The survey, which polled Canadians across the country who either currently own or intend to purchase a recreational property within the next five years, found that most (82 per cent) Canadians say interest rates will influence their decision to purchase a recreational property – and a majority (58 per cent) feel added urgency to buy a recreational property while interest rates are low.
Survey respondents demonstrated overall optimism regarding the Canadian recreational property market. When asked what they believe recreational property prices will do in the coming year, half (50 per cent) of respondents indicated that prices will increase and one-third (32 per cent) said they will stay the same. And of those planning to purchase a recreational property within the next five years, 76 per cent said they are more inclined to buy a property in Canada than in the U.S. or elsewhere.
“Despite financial and economic uncertainty, or perhaps because of it, we have found that the enduring value of recreational properties is widely-recognized by Canadians,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “In contrast to our large urban centres, where home prices shot up in recent years before rapidly cooling in 2013, the recreational property market has remained remarkably stable and resilient.”
Soper continued, “I shy away from recommending real estate as an investment for the typical family. Shelter is, after all, primarily consumption. However in Canada today, where we see virtually no return on bonds and other forms of modest risk savings, it is reasonable to view recreational property in a new light. This prolonged low-interest environment supports purchase decisions based upon lifestyle and supported with a sound investment thesis.”
According to the survey, the majority of current recreational property owners plan to keep their properties long-term, with 60 per cent stating that they are somewhat or very unlikely to sell their property upon retirement. At the same time, almost two-thirds (64 per cent) are not planning to use their recreational home as their primary residence upon retirement. For those planning to purchase a recreational property for retirement, financial feasibility is among the most important factors they are looking for, with affordable purchase price (56 per cent) and reasonable maintenance costs (39 per cent) topping the list. Waterfront access (37 per cent), proximity to town (33 per cent) accessible medical facilities (26 per cent) and proximity to their primary residence (22 per cent) were also cited as important property attributes.
Properties on a lake are by far the leading property type, with almost half (41 per cent) of those planning to buy indicating that this is their first choice, followed by a property in the mountains or woods (17 per cent) and a condominium in a recreational community (13 per cent). When asked what financial and/or lifestyle changes they would be willing make in order to purchase their dream recreational property, almost one-third (31 per cent) said they would rent their property out during the year. Other strategies include reduce discretionary spending (25 percent), downsize primary residence (24 per cent), purchase a fixer-upper (23 per cent) and purchase with friends/family (22 per cent).
“Canadians have long valued the ability to escape the city to spend time with friends and family,” said Soper. “A place to get away from the pressures of daily life seems to be more attractive now than ever. From coast to coast, Canada offers some of the world’s most spectacular landscapes and friendly communities.”
The survey was commissioned as part of the 2013 Royal LePage Recreational Property Report, an annual market analysis of recreational property prices, trends and activity in selected leisure markets across the country.