Millennials looking to buy cottages despite housing challenges: Royal LePage
Royal LePage is expecting another year of price gains in cottage country this spring, led by strong demand in the Ontario and Quebec markets.
In its latest spring recreational property report, the brokerage is forecasting recreational detached home prices will rise 4.7 per cent to an average of $429,714 by next spring.
Low inventory has been plaguing Ontario's recreational property market, causing competition between young families - which traditionally make up the biggest portion of cottage buyers - and baby boomers.
"Today [young families] find themselves having to compete with their parents for that spot on the water, with boomers leveraging the significant equity from their existing urban homes," Phil Soper, president and CEO of Royal LePage said in the report. “In Ontario and Quebec, this has resulted in exceptional demand and upward pressure on prices.”
Despite the late start to spring in Ontario and Quebec that has also brought heavy rains and flooding in a number of regions, Royal LePage says cottage buyers are still flocking to those two markets.
In Ontario’s highly-sought after Muskoka region, one sales representative says he’s seeing older buyers cash out of their urban homes and moving north.
“We are seeing people in their 50s and 60s cashing out with significant amounts of money, as well as those who are coming into money and want to get out of the rat race,” said Bob Clarke, sales representative with Royal LePage. “A 300-foot lot on southern Lake Joe once would be about $1.6 million. Now, if I found one west-facing it would likely be $3.0 million. That puts pressure on 100- and 200-foot lots.”
Strong demand in central Canada will only be partially offset by weakness in British Columbia's recreational home market as sales activity appears to be declining in tandem with the province's primary residential market, the report found.