The recent RE/MAX report indicates that the current Canadian market with recreational property has been taken over by Generation X, which replaced the previous main buying force formed by the baby boomer generation growing older.
Who are the people in Generation X?
Over the years, social scientists have developed the practice of giving fancy names to the generations of the 20th century. The members of a particular generation have been influenced by all the various political and cultural aspects of their time period which gives us the dating. Whereas 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 buy recreational property at almost any price.
The change is mostly noticeable when you compare the first half of 2009 statistics to the 2008 results. The trend moving towards recreational property buyers in their 30′s was observed by 74 percent of markets in this year’s surveys. The recreational properties sold varied from waterfront cottages to resort condos. It is a significant change, compared to the 40 percent in 2008. From January till April 2009, the amount of sold recreational properties declined – at least two thirds of all surveyed markets reported such trend. But now, since the start of the new cottage season, a lot of major centers are now reporting an intensive buyer activity.
The most important points of the report:
Supply is sufficient 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. Older cottage owners, many of whom own their properties outright, are selling to younger purchasers with families. Numerous cottages in Canada are owned by Americans, who are presently taking advantage of the stronger dollar to cash out of the market. There are some exceptions of course, but we can say that American buyers have mostly disappeared. Many buyers who were planning to buy a recreational property in the second half of 2008 rather delayed the purchase to 2009. This is a market factor known as pent-up demand. Older Canadians continue to seek secondary homes in warmer parts of the U.S. such as Florida, Arizona, California, and Nevada. Purchasers from the X Generation are now mostly ready to spend their hard-earned dollars on holiday properties. But at the end of the whole transaction, they want to be sure they’ve gotten the best possible result out of it.
