Summer has finally arrived, and many Canadians consider this a great time to buy a recreational property.
The Canadian real estate market had record-breaking activity during the coronavirus pandemic, but now market conditions have normalized, with many markets shifting into balanced territory. Consumer confidence is improving, and with “cottage season” arriving soon, the recreational property market is hot.
Statistics show that nearly 11 per cent of Canadians own a cottage, and around the same number of people aim to purchase one in the coming years.
The biggest motivator to purchase a recreational property? The quality of life many believe these properties offer.
Another major motivator is the belief that homeowners can pass these recreational properties down to their families.
In addition, another notable reason for considering the purchase of recreational property is to earn rental income. However, at the same time, economic uncertainty, especially in today’s rising-rate environment, has resulted in nearly 69 per cent of Canadians being hesitant to invest in recreational property.
With that being said, the Canadian real estate market is showing signs of renewed life, with home sales increasing 5.1 per cent month-over-month in May, according to the Canadian Real Estate Association (CREA). Moreover, the number of newly listed properties increased by 6.8 per cent. While property prices have somewhat stabilized compared to the high prices during the pandemic, the market is fairly stable, with the MLS Home Price Index climbing by 2.1 per cent month-over-month.
However, supply for recreational properties can still be challenging as the number of buyers during peak season can make prices more competitive for buyers.
To Buy or Not to Buy a Cottage
Whatever the reasons, people who have been counting the days until winter ends to spend some quality time with their loved ones can now start looking for the ideal recreational property.
There are many possibilities:
- Beachfront properties located along beautiful waters and offer easy access to beaches, water sports, and coastal living.
- Lakefront properties situated near lakes provide opportunities for fishing, boating, kayaking, canoeing, and other water-based activities.
- Cabins and chalets are nestled in beautiful mountainous locations and are perfect for hiking, biking, and wildlife exploration.
- Golf course properties are ideal for avid golfers.
Put simply, there is a lot to choose from.
If you are serious about purchasing a recreational property, this is the time to get into action as demand is usually very high this season, and availability and prices could be competitive depending on where you want to buy such a property. Industry observers typically recommend considering your interests and activities that you prefer so that you can find out the best property that aligns with your recreational pursuits.
At the same time, ensuring you have the financial means and stability to take on such an initiative before jumping into this major buying decision is imperative. You should consider a broad array of factors, such as interest rates, financing options, and your ability to handle the additional expenses associated with owning a recreational property.
Experts also suggest closely evaluating the different amenities extended in the recreational communities, as some properties are only open six months a year while others are accessible all year. Some areas have better transportation and services, while others are more remote, with less access to services we tend to take for granted in the big city.
If your primary goal is to purchase recreational property for personal use, these factors become even more significant. If you are looking for an investment property, it is vital to consider which type of property and location would give you the most value.
In most cases, the most important factors when evaluating a recreational property would be proximity to desired activities (boating, swimming, or golfing). Another component might be the infrastructure and amenities of the neighbourhood, which can also make a big difference. Safety and security are always worthy criteria for buyers.
Must Haves and Nice to Haves
Ultimately, the best type of recreational property is the location, activities, and prices that suit you and your family. Indeed, for those interested in recreational properties, this might be the right time to study the market trends, visit different neighbourhoods that match your vision, and find a trusted real estate agent to help you achieve your goals.
With cottage season in full swing, there will likely be more buyers than the available supply.