The Ontario recreational-property market is showing signs of recovery, with a new generation of younger buyers driving sales across cottage country, according to a Re/Max report.
The realty firm noted a generational shift in 74 per cent of markets surveyed, with purchasers born from 1965 to 1980 snapping up affordably priced properties in high-demand areas such as Bancroft, Honey Harbour, Orillia and the West Kawarthas.
Michael Polzler, executive vice-president, regional director, Re/Max Ontario-Atlantic Canada, said in an interview this week that Generation X represents the next wave of recreational property owners in Canada:
"After being priced out of most markets for the better half of the last decade, Gen X purchasers now have the financial wherewithal to buy recreational product at virtually every price point. Gen X is ideally positioned to pick up any slack in recreational-property markets caused by softer demand from baby boomers and retirees. They are driving the market right now, and that's not something we've seen in the past."
After being priced out of most markets for the better half of the last decade, Gen X purchasers now have the financial wherewithal to buy recreational product at virtually every price point. Michael Polzler, Re/Max Ontario-Atlantic Canada
Prices are still off slightly in most regions, with 66 per cent of recreational markets surveyed reporting a decline in the number of properties sold in the first months of 2009, while 22 per cent indicated that sales were either up or on par compared with a year ago.
"There's no question that it's a buyers market right now," Mr. Polzler continued. "Sellers have to be more realistic in pricing their properties than in previous years. But in no way are we seeing fire sales. Prices were down in January, as they traditionally are. But right now, we are seeing improvement in most places."
One exception is the Collingwood area, where a surfeit of new properties in the form of condos and townhouses has driven prices down by as much as 40 per cent over last year.
By contrast, the Huntsville and Lake of Bays areas of Muskoka, where recreational properties tend to be more traditionally lakefront cottages, are experiencing price increases in the $200,000-to-$300,000 range.
On the other hand, bigger-ticket properties on the three big Muskoka lakes near Bala and Port Carling are seeing a drop in prices. There, the starting price for a recreational property has fallen to $450,000 from between $500,00 and $550,00 a year ago.
"Those lakes are stock-market driven," Mr. Polzler said. "Real estate there is definitely tied to the economy, and so prices are down. But that could change once the economy improves."