ROYAL LEPAGE RECREATIONAL PROPERTY REPORT 2003
COTTAGE PURCHASERS THINK CREATIVELY TO AFFORD A SLICE OF PARADISE
Royal LePage Poll also reveals that within the next three years 6% of Canadians are likely to purchase a cottage/recreational property
TORONTO, May 15, 2003 – Escalating recreational property values are prompting many prospective purchasers to contemplate more creative methods of finance to make cottage ownership more affordable. For example, 40 per cent of prospective buyers say that they plan on renting out the cottage/recreational property that they might buy to help cover some of the costs, according to Royal LePage Real Estate Services Ltd., a wholly-owned subsidiary of Brascan Financial Corporation (TSX: BNN.A).
The Royal LePage Recreational Property Report 2003 comprises a poll of cottage owner and buyer attitudes (conducted by Ipsos-Reid) and a market analysis of trends, activity and prices in recreational property markets across Canada.
Royal LePage's market analysis indicates that renting out one's cottage property is a trend in Nova Scotia, New Brunswick, Ontario, Alberta and British Columbia. However, renting out the vacation home is less prevalent among existing cottage owners. In fact, only 10 per cent of cottage owners say that they rent out their cottage/recreational property when it is not in use.
Tight market conditions are driving recreational property prices upwards. The poll findings illustrate that within the next three years six per cent (6%) of Canadians are likely to purchase a cottage/recreational property. Currently, only eight per cent (8%) of Canadians own a cottage/recreational property and of those only 17 per cent are likely to sell their recreational property within the next two to three years.
"In 2003, there will be four Canadians seeking recreational properties to every one cottage owner who plans on selling, and this scarcity of supply continues to exert pressure on property prices across the country," said Sherry Chris, executive vice president, network services, Royal LePage Real Estate Ltd.
Chris added: "Low interest rates, people re-directing their investment dollars from the stock market into recreational real estate, and Americans buying slices of Canadian recreational paradise are the compelling factors that are sustaining demand, seller's market conditions, and higher property prices in most recreational markets. Additionally, lifestyle changes are also fuelling the demand for year-round recreational residences in many provinces."
When cottage owners and potential purchasers were asked, "What best describes what you are looking for most in cottage life?" 50 per cent said peace and tranquility, 38 per cent said quality family time and nine per cent (9%) said to party and let loose.
However, not all cottage owners get the peace that they are craving. The poll findings illustrate that 15 per cent of cottage owners have had to ask neighbours or others around their cottage to keep the noise or music down.
From land issues to water issues, 37 per cent of cottage owners and prospective buyers think that police patrol on cottage lakes and waters is inadequate.
Additional poll findings:
When it comes to new development, 33 per cent of recreational property owners are in favour of new development in the area in which their property is located, down from 39 per cent who favoured development in 2002. Tight market conditions may be swaying the opinions of prospective buyers as this year, 55 per cent say that they favour new development in the areas that they are searching compared to 50 per cent of purchasers who favoured it last year.
In 2002, only 13 per cent of cottage owners said they would be likely to sell their recreational property within the next two to three years. The number of prospective cottage purchasers (6%) and cottage owners remains generally unchanged since 2002 (9% in 2002 versus 8% in 2003).
Multiple offer situations are a common occurrence in recreational areas in Quebec, Ontario, Manitoba, Alberta and British Columbia.
Americans are seeking recreational properties in the following areas: Brackley Beach, Cavendish, Rustico, South Shore, Prince Edward Island; Liverpool, Lunenburg, South Shore – Bridgewater, Nova Scotia; Lake Brome, Lake Memphremagog, Mont Tremblant, Quebec: Haliburton; Ganonoque and Kingston; Rideau Lake; Muskoka; Port Carling; Gravenhurst; Lake Joseph; Lake Rosseau; Bracebridge; Bala; Honey Harbour; Collingwood, Ontario: Lake of the Woods; Lake Winnipeg, Manitoba; Canmore, Alberta; Big White, Cranbrook, Kimberley, British Columbia.
European buyers are pursuing properties in Liverpool, Lunenburg, South Shore – Bridgewater, Nova Scotia; Shediac, New Brunswick;Muskoka; Port Carling; Gravenhurst; Lake Joseph; Lake Rosseau; Bracebridge; Bala; Collingwood, Ontario; Lake Brome, Lake Memphremagog, Mont Tremblant, Quebec; Canmore, Alberta; Kimberley, British Columbia.
New developments are underway in the following areas: Collingwood, Ontario; Regina Beach, Qu'Appelle and Last Mountain Lake, Saskatchewan; Sylvan Lake, Alberta; Big White; Fernie; Kimberley, British Columbia.
The poll portion of the Royal LePage Recreational Property Report was conducted by Ipsos-Reid between April 14 and April 29, 2003. The poll is based on a randomly selected sample of 4,000 adult Canadians with a total of 537 Canadian respondents who qualified for the study. With a sample of this size, the results are considered accurate to within +/-4.3%, 95% of the time, of what they would have been had the entire adult Canadian population been polled. These data were statistically weighted to ensure the sample's regional and age/sex composition reflects that of the actual Canadian population according to the 2001 Census data.
Royal LePage is Canada's leading full service real estate company, with over 9,000 employees and representatives in more than 500 residential and commercial offices across Canada. International affiliates augment the company's service network. Royal LePage is a wholly-owned subsidiary of Brascan Financial Corporation. For more information visit www.royallepage.ca.
Demand continues to outweigh supply in Canmore's recreational market thereby sustaining seller's market conditions. With listing inventory diminished by approximately 40 per cent year-over-over, multiple offer situations are now a common occurrence with many properties selling above asking price. Consequently, average property prices were pressured to rise.
The price of a standard chalet within 30 minutes of Banff increased to $320,000, in 2003 compared to $250,000 in 2002, while condominium prices increased to $165,000, compared to $145,000 year-over-year.
The most popular price point for recreational properties is in range of $200,000 to $350,000. For this price, a relatively new property with a scenic view, open-design and quality finishes can be purchased.
Demand for high-end properties in the range of $500,000 to $600,000, continues to escalate. Equipped with hardwood floors, granite countertops, vaulted ceilings and steam showers, these luxurious properties cater to a distinct clientele and offer a "home away from home."
"Technological advances has fuelled a change in lifestyle trends for many residents of Canmore. Tele-commuting, which is now a reality for many professionals, is enticing more people to purchase their primary residence in Canmore and to commute into the city a few times a month," said Brad Hawker, broker/owner, Royal LePage Rocky Mountain Realty Ltd., Canmore. "As a result, the population of Canmore continues to increase and we expect that it will more than double in the next decade."
Canmore's unique proximity to major cities makes it a popular choice for many buyers. It is the only resort area located within an hour of Calgary and four hours of Edmonton.
Once known as the playground for Albertans, in recent years Canmore has become more internationally renowned, attracting residents from the US, Eastern Canada and Europe. Baby boomers are drawn to the area and are attracted to the active lifestyle they are encourages.
ROYAL LEPAGE RECREATIONAL PROPERTY REPORT 2003