Gen X has its moment in the sun as intergenerational wealth transfer gives them means to fuel demand in cottage country
RE/MAX Canada anticipates average residential prices in recreational markets to rise up to 0.9 per cent through the remainder of 2023
RE/MAX Canada brokers in 91 per cent of regions surveyed report Generation X driving demand for recreational property
51 per cent of Canadians who own or plan to own a recreational property (47 per cent of Gen Xers) pointed to the opportunity to pass down a recreational property to family, as a key motivator to buy one.
The quality of life that a recreational property affords in comparison to urban/larger city centres is the top-mentioned attraction for 55 per cent of prospective buyers in Canada
TORONTO and KELOWNA, BC, April 27, 2023 /PRNewswire/ -- Amid the long anticipated $1 trillion transfer of wealth from Baby Boomers, coupled with the search for more-affordable housing markets, Generation X now leads the pack in recreational property transactions, with this buying cohort driving activity in 91 per cent of recreational regions surveyed, according to RE/MAX Canada's 2023 Cottage Trends Report. Historically, recreational market activity has been driven by retirees, inclusive of both Baby Boomers and Gen X (91 per cent, according to RE/MAX research conducted in 2018).
Following record-setting activity in 2022, the waters have tempered in recreational markets with 50 per cent of regions now experiencing more balanced conditions. Despite demand tapering due to economic uncertainties in the latter half of 2022 and carrying into the first quarter of 2023, RE/MAX brokers and agents anticipate consumer confidence to rise in tandem with the temperature, into "cottage season" and through the remainder of the year. Overall, average residential sale prices are expected to rise by 0.9 per cent.
To view the full interactive report, please click here.
As Canada continues to experience affordability challenges, 51 per cent of Canadians who own or plan to own a recreational property (47 per cent of Gen Xers) pointed to the opportunity to pass down a recreational property to family, as a key motivator to buy one, according to a Leger survey conducted on behalf of RE/MAX Canada.
"It's interesting to see Gen X gaining more of a foothold in recreational markets across Canada. Demand, coupled with the desire to own and keep these properties in the family, may further impact already low inventory levels in this segment of the market," says Christopher Alexander, President, RE/MAX Canada. "When it comes to succession planning, recreational properties are always a good addition to any real estate portfolio, especially given the long-term ROI that they typically yield, making them an excellent opportunity for inheritance aspirations as well."
The Leger survey also found that 42 per cent of current recreational property owners in Canada are holding onto their properties in the hopes of passing them down to family members, while 56 per cent have or plan to put their property in their beneficiary's name while they are alive. Three-quarters of recreational property owners (74 per cent) also feel confident that with proper succession planning, they will be able to seamlessly pass down their property to family members. In fact, 48 per cent of recreational property owners agree that working with a real estate agent has led them to consider factors such as succession planning for their properties.
According to the Leger survey, the quality of life that recreational markets offer is another appealing factor of recreational property ownership, with 36 per cent of Canadians who own or plan to own a recreational property (45 per cent of Gen X) attracted to recreational markets for the liveability they offer compared to larger city centres – a figure that is higher among prospective buyers, at 55 per cent. The top five "must-haves" among Canadians for recreational properties include affordable purchase price (43 per cent); proximity to water or waterfront (32 per cent); reasonable maintenance costs (29 per cent); proximity to needed amenities (29 per cent); and all-season access to emergency services (27 per cent).
"As the lines between recreational and residential properties become increasingly blurred in a trend that emerged during the pandemic, quality of life has become even more important," says Elton Ash, Executive Vice President, RE/MAX Canada. "As the warmer weather approaches, and economic conditions begin to stabilize, buyer confidence is returning to recreational markets."
Regional Deep Dive into Canadian Recreational Markets
RE/MAX Canada brokers and agents were asked to provide an analysis of their local market activity for the first quarter of 2023, as well as an outlook for the remainder of the year. Additional overarching regional trends include:
Retirees, families and couples are the top three consumer segments leading activity in the market - 82 per cent, 68 per cent and 55 per cent respectively.
Waterfront properties (77 per cent) and access to recreational activities (59 per cent) like skiing and water sports, are the most sought-after features of recreational markets.
To view the full regional data table, please click here.
Western Canada
Mirroring the conditions across the country, regions in Western Canada have either transitioned to balanced or remained favouring sellers. Specifically, Albertan cottage markets (Canmore and Sylvan Lake and surrounding areas) and Whistler, BC skew towards sellers, due to demand outpacing supply. Meanwhile, in British Columbia both Tofino and Ucluelet can attribute balanced conditions to buyers becoming more reserved and releasing pressure on demand.
Adhering to the prevailing national trend, Gen X and more specifically families, couples and retirees propel demand in Western Canada. Although sales activity has decreased across all regions, residential sale price is anticipated to remain unchanged in Sylvan Lake and surrounding areas, AB; Tofino, BC; Ucluelet, BC and Whistler, BC for the remainder of 2023. While properties in Canmore, AB may experience a rise of up to eight per cent in average residential sales prices in the remainder of 2023, due to dwindling inventory and rising consumer optimism.
To view individual insights of Western Canada regions, please see below.
Canmore, AB – please click here.
Sylvan Lake and surrounding areas, AB – please click here.
Tofino and Ucluelet, BC – please click here.
Whistler, BC – please click here.
Ontario
Despite most regions favouring sellers last year, following interest rate hikes and ongoing economic uncertainty, a majority (67 per cent) of recreational markets in Ontario are now in balanced conditions. Muskoka, Haliburton and Greater Sudbury, Windsor-Essex, Manitoulin & French River, ON are the outliers that still favour sellers. Ontario recreational market activity is being driven in majority by Gen X buyers – specifically families and retirees showing particular interest in waterfront properties.
According to RE/MAX brokers and agents, residential sale prices in recreational markets are expected to grow by two per cent in Muskoka and Haliburton; four per cent in Peterborough and the Kawarthas; five per cent in Greater Sudbury, Manitoulin & French River; three per cent in Windsor-Essex; 5.8 per cent in Lake Simcoe and two per cent in Prince Edward County. Meanwhile, other regions are expected to cool slightly and anticipate a reduction in residential sale prices, including Rideau Lakes by one per cent; Southern Georgian Bay by 1.5 per cent; and Kenora and Lake-Of-The-Woods by 6.5 per cent. Bruce Peninsula & Sauble Beach foresee a steeper decline in residential home prices of 11.5 per cent which can be attributed to the ongoing demand readjustment, while prices in Grand Bend are anticipated to remain unchanged.
To view individual insights of Ontario regions, please see below.
Bruce Peninsula & Sauble Beach, ON – please click here.
Grand Bend, ON – please click here.
Greater Sudbury, Manitoulin & French River, ON – please click here.
Haliburton, ON – please click here.
Kenora and Lake-of-the-Woods, ON – please click here.
Lake Simcoe, ON – please click here.
Muskoka, ON – please click here.
Peterborough and the Kawarthas, ON – please click here.
Prince Edward County, ON – please click here.
Rideau Lakes, ON – please click here.
Southern Georgian Bay, ON – please click here.
Windsor Essex (Belle River/Lake St. Clair), ON – please click here.
Atlantic Canada
Unlike Ontario and Western Canada, the majority of regions in Atlantic Canada – with the exception of Charlottetown Area, PEI – including St. John's; Central PEI; Annapolis Valley, NS; and Sydney & Cape Breton, NS continue to favour sellers due to limited inventory. Despite the number of sales decreasing year-over-year in most cottage markets of the Atlantic, many regions including Sydney & Cape Breton, NS; St. John's, NL; Charlottetown Area, PEI and Annapolis Valley, NS experienced modest year-over-year sale price appreciation - 15.3 per cent, three per cent, 9.2 per cent and 3.5 per cent respectively. This can be attributed to the magnetism these markets continue to have for out-of-province buyers - a unique factor to the region, as well as low inventory, specifically in Sydney & Cape Breton, NS.
In contrast to other regions across Canada, Atlantic recreational property sale prices are anticipated to increase - St. John's, NL and Annapolis Valley, NS both anticipate a modest increase of five per cent for the remainder of the year, while prices are forecasted to rise 8.6 per cent by the end of the year in Sydney & Cape Breton, NS. Like in Western Canada, Gen X buyers are the majority stakeholders driving demand in the Atlantic - specifically retirees and couples. The region continues to attract families and out-of-province buyers due to the relative affordability their market provides, in comparison to Ontario and Western Canada.
To view individual insights of Atlantic Canada regions, please see below.
Annapolis Valley, NS –please click here.
Central PEI, PEI – please click here.
Charlottetown Area, PEI – please click here.
St. John's, NL – please click here.
Sydney/Cape Breton, NS – please click here.
About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,527 Canadians was completed between March 17-19, 2023, using Leger's online panel. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
About the 2023 RE/MAX Canada Cottage Trends Report
RE/MAX's 2023 Cottage Trends Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region. Generation X is defined as those ages 43-58, and Boomers ages 59-79.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children's Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
*Baby Boomers - defined as those between 59-79 years old
**Gen X - defined as those between the ages of 43-58 years old
Forward looking statements
This report includes "forward-looking statements" within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company's business, the Company's ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company's ability to attract and retain quality franchisees, (6) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company's ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company's ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
SOURCE RE/MAX Canada
