Buyers of the “Generation X” age cohort are fuelling demand for Canadian recreational real estate, according to a new report that attributes the shift in part to a wealth transfer from older generations.
RE/MAX Canada’s 2023 Cottage Trends Report, published on Thursday, said Gen X – defined as people between the ages of 43 and 58 – is driving demand in 91 per cent of surveyed recreational property markets, as buyers in that age group inherit money from Baby Boomer parents and relatives.
“It’s interesting to see Gen X gaining more of a foothold in recreational markets across Canada,” RE/MAX Canada president Christopher Alexander said in a written statement.
“Demand, coupled with the desire to own and keep these properties in the family, may further impact already low inventory levels in this segment of the market.”
Retirees – a demographic that includes both Gen X and Baby Boomers aged 59 to 79 – have typically dominated the cottage country market, the report said.
INHERITANCE POTENTIAL AND LIVABILITY
A Leger survey conducted for the report found more that 51 per cent of Canadians who own or plan to own a recreational property were motivated by the chance to pass their real estate assets down to children or other family members. Forty-two per cent of recreational owners were holding on to properties with the intent of leaving them to relatives.
Quality of life was another major factor buyers said they were considering when it comes to recreational real estate. More than half of prospective buyers, at 55 per cent, cited livability compared with urban centres as what attracted them to the recreational market.
Elton Ash, executive vice-president at RE/MAX Canada, said livability has emerged as a top priority since the COVID-19 pandemic set in.
“As the lines between recreational and residential properties become increasingly blurred in a trend that emerged during the pandemic, quality of life has become even more important,” he said in a written statement.
OUTLOOK FOR 2023
The report predicted recreational sale prices will rise 0.9 per cent this year, and Ash said “buyer confidence is returning to recreational markets” as warmer weather approaches and economic conditions stabilize.
The recreational market has cooled after last year’s “record-setting activity,” the report said, with half of surveyed cottage country regions seeing “more balanced conditions” after demand tapered off amid economic uncertainty in late 2022 and early 2023.
But RE/MAX brokers and agents reported that they expect consumer confidence to rise in the warmer months and throughout the rest of the year.
METHODOLOGY
An online survey of 1,527 Canadians was completed between March 17-19, 2023, using Leger’s online panel. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
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