According to the RE/MAX report issued this summer, Generation X is taking over the recreational property markets in Canada this year, replacing the aging baby boomer generation as the main buying force.
What exactly is Generation X? Over the years, social scientists have developed the habit of giving fancy names to the generations of the 20th century. Dating of a particular generation depends on all the different political and cultural aspects of the period that influenced the upbringing of members of that generation. While baby boomers (those born in the period of mid 40’s late 50’s) were the most active buying force until just a few years ago, most of them have entered or are just about to enter retirement. At the same time, the children of baby boomers named as Generation X, now in their 30’s or 40’s, have finally got the financial ability to purchase recreational property at almost any price.
The change is especially noticeable when you compare the first half of 2009 results to the 2008 results. 74 percent of markets surveyed this year reported a trend towards thirty-something buyers purchasing a wide selection of recreational property products ranging from waterfront cottages to resort condos. This compares with just 40 percent in 2008. It is true that two-thirds of the recreational property markets surveyed showed a decline in the number of units sold in the first 4 months of 2009. However, many major centers are now reporting an increase in buyer activity since the cottage season began.
Highlights of the report:
- Supply is adequate in most markets, but heated activity in the lower-end has resulted in tight inventory levels for entry-level product in 18 per cent of markets including: Bancroft, Combermere, Honey Harbour/Port Severn, West Kawarthas, Orillia, Flesherton, North Saskatchewan, and Salt Spring Island.
- Older cottage owners, many who own their properties outright, are selling to younger purchasers with families.
- Some American cottage owners in Canada are taking advantage of the stronger dollar to cash out of the market.
- American purchasers have largely fallen off the radar, with some exceptions: Lake Winnipeg, Shediac Bay, and Sault Ste. Marie.
- Pent-up demand is a factor in the marketplace, as those purchasers who had intended on buying recreational properties in the latter half of 2008 deferred their purchases to 2009.
- Older Canadians continue to seek secondary homes in warmer parts of the U.S such as Florida, Arizona, California, and Nevada.
- Generation X purchasers are prepared to spend their hard-earned dollars on recreational properties, but at the end of the day, they want to know that they’ve negotiated the best deal possible.
- The upper-end has somewhat softened in markets across the country.
Although Generation X was pushed back on the recreational property market during the last years, it was waiting patiently for their chance. And it finally came this year, when overall real estate market drop was like start signal for them to rush for the recreational property. In BC, some recreational properties’ starting price dropped by more than 10% (Vancouver Island, Gulf Islands…).
They want it and they can pay for it – Generation X will be the key player on the recreational property market in Canada for some years.
Read the full report here.