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Winnipeg Free Press - PRINT EDITION

Cottage prices higher here

Young buyers keeping market hot in spite of recession

By: Murray McNeill

3/06/2009 1:00 AM | Comments: 2

They're young, they're more impulsive, and they're picking up where the baby boomers left off when it comes to buying cottages.

Generation X -- people born between 1965 and 1980 -- are the new driving force in the recreational-property market, according to a report issued Tuesday by real estate giant RE/MAX.

They're also helping to keep Manitoba cottage country prices more buoyant than in most other parts of the country.

The 2009 RE/MAX Recreational Properties Report shows Lake Winnipeg is one of only a handful of recreational property markets in Canada to see an increase in the last year in the starting price of winterized, three-bedroom, lakefront cottages.

Those properties now start at $300,000 a year, compared with $250,000 a year ago, it says.

That's in sharp contrast to markets like B.C.'s Okanagan Valley, where prices are down by 25 per cent.

Even prices for seasonal and non-lakefront cottages on Lake Winnipeg -- the latter are referred to as second-row properties -- have held up well during the recession, one local RE/MAX agent said.

"They're either stable or increasing," said Sheldon Brounstein of RE/MAX Real Estate Services in Gimli in an interview, adding the starting prices for those properties are in the range of $100,000 to $185,000.

Brounstein said it's only in the last couple of years that he started to notice a surge in the number of Gen-X buyers.

"They're looking for recreation any time they can get it, because life is more pressure-filled now than it's ever been," he said.

Gen-Xers also approach cottage ownership a little differently than baby boomers, who tended to wait until they were older and well-established before buying a cottage, according to Judy Calvert-Pierce, co-owner of Beaches Realty in Belair.

"The younger generation, whether they can afford it or not, go out and buy," Calvert-Pierce said. "They want it now." The RE/MAX report only looked at the cottage market around Lake Winnipeg. It didn't include other popular areas such as the Whiteshell and Lake of the Woods.

Duncan Carmichael of Duncan Carmichael Real Estate Brokerage in Kenora said the recession has had a bigger impact on selling prices in Northwestern Ontario's cottage country.

Carmichael said prices have for the most part levelled off this year. Most property owners aren't seeing the increases of five to 10 per cent, or in some cases even more, they were seeing in the previous few years.

Carmichael said demand has also been a little softer this year in the northwestern Ontario area.

And part of the reason is that it doesn't attract as many Gen-X buyers because virtually all of the cottages are lakefront and more expensive. On Lake of the Woods, for example, the starting point is $400,000 to $500,000.

The RE/MAX report confirms it's the more modestly priced properties that are in the most demand in the Lake Winnipeg market.

"Second-row cottages, in particular, have seen an upswing in popularity due to affordability and supply," it said.

Brounstein said pricing isn't the only thing that's drawing Gen-X buyers to Lake Winnipeg. Distance is also a factor, particularly with gas prices on the rise again.

"I think that we're getting is some fallout from gas (prices) and the expense of driving further to get to the Whiteshell or Lake of the Woods," he said.

RE/MAX said most of the 50 Canadian markets it surveyed this year "reported a marked trend toward thirtysomething buyers snapping up affordably priced product, ranging from waterfront cottages to resort condominiums, compared with just 40 per cent in 2008."

Part of the reason, it said, is the growing financial strength of generation Xers who have been "priced out of most markets for the better half of the last decade," Michael Polzler, RE/MAX's regional director for Ontario and the Atlantic, said in a statement.

As well, RE/MAX said this generation is able to take advantage of the lower prices that have developed as a result of the recent economic downturn.

-- With files from Canwest News Service

What's driving the market

The recession hasn't dulled the demand for properties in Lake Winnipeg's cottage country, nor has it had much of a dampening effect on prices, according to RE/MAX's 2009 Recreational Properties Report released Tuesday. Here are some of the other things the report had to say about the Lake Winnipeg market:

It's also one of only a few where Americans are still actively buying properties, although not to the same extent as in previous years.

The number of cottages for sale is on the upswing as a growing number of older retirees trade in their cottages for waterfront condominiums.

Seasonal and second-row (not lakefront) cottages are the most sought-after properties because they're more plentiful and more affordable than most winterized or lakefront ones.

While most buyers are purchasing cottages for their own use, a growing number of them are renting them out to offset the cost of ownership.

Republished from the Winnipeg Free Press print edition June 3, 2009 B6

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