An overwhelming majority of Canadians who have either purchased, or who intend to buy recreational property, believe a vacation home is a good long-term investment.
According to a nationwide survey of Canadian attitudes towards recreational property ownership commissioned by Royal LePage Real Estate Services, 89 per cent of current owners and prospective buyers agree it is a sound way to invest money.
Broken down by region, this included 92 per cent of respondents from Alberta, 91 per cent of Ontarians, 87 per cent of B.C. residents and 81 per cent of people surveyed in Quebec.
When respondents were asked to compare recreational properties to the stock market in terms of providing a larger financial return on investment, 50 per cent said recreational properties provided a larger return. Only 29 per cent replied investing in the stock market, while 21 per cent were undecided.
“Canadians’ confidence in recreational property values is mirroring what we have been seeing in Canada’s urban centres,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “This spring, the horror stories from some fundamentally flawed international housing markets that had dampened demand for cottage-type living during the recession era, are being shrugged off. Canada’s traditionally buoyant recreational property market appears to have found its groove once more.”
A majority of respondents (57 per cent) said the expectation of interest rates rising will not affect their desire to purchase a recreational property.
When it came to financial and lifestyle sacrifices to purchase a recreational property, more than a third polled (35 per cent) responded that they were most likely to reduce personal spending throughout the year. The two least favoured strategies were to drive as far as necessary and to make the recreational property a primary residence, both 13 per cent.
The survey indicates buyers looking for recreational property around Vernon can expect to pay up to $1 million for waterfront, and anywhere from $199,000 to $450,000 for land access.
“Relentlessly wet and miserable weather has delayed the 2011 buying season in some regions of the country. But while weather delays intent, it doesn’t change it. We expect to see considerable activity in the coming months – especially in higher-end and luxury segments,” added Soper.
More than half (51 per cent) of those polled said they are, or will be, renting out their property to offset their mortgage and other associated costs. However, many of those willing to rent plan to be selective (32 per cent) and only rent their recreational property to someone who have been referred by someone they knew.
