Irrespective of any region or time, people have always cherished the dream of enjoying a quiet holiday in the lap of nature and far removed from the stress and strain of the routine urban life. It not only provides the much needed break from the hectic daily life, but also reinvigorates the body and the mind for undertaking fresh tasks. Hence, it is little surprising that the Americans cherish their camps, while the Russians are fond of their dachas. The Swiss, on the other hand, have a fondness for chalets and the British are mad about their country houses. In Canada, people are crazy about their cabins and cottages.
It is interesting to note that regardless of the entire spotlight on the fiery housing realty market, in the midst of the recent global economic slump Canada had witnessed significant buoyancy in the real estate market for leisure properties, particularly those located on a water front. This trend has definitely surprised many in the industry. The period between the latter phase of 2008 and first half of 2009 witnessed a short-lived dullness in the recreational realty market. However, recent reports demonstrate that the volume of sales of such properties has livened up rapidly during the previous summer - much before it became apparent that the most horrible fiscal news was revealed.
With the onset of the spring realty season, it is now expected that the sales as well as the prices of the cottages will once again jump back to where they were during the peak they attained during 2007. The consumers' buoyancy has already been reinforced following the constant enhancement in the rate of employment. Many are of the view that this single aspect is a vital element in the bounce back considering the fact that the mean cost of a three bedroom water front realty in Canada is presently anything between $370,000 and $600,000. Going by the nature of residential real estate market in Canada, it has been possible to generate a further reasonable market primarily owing to the calming down of the prices of recreational real estate throughout the fiscal recession as well as the boost in availability of such properties. As a result, the demand for recreational properties on a water front is increasing among the younger generation, who had earlier been kept out of the tense market conditions.
Meanwhile, an additional stimulation for people to buy recreational properties seems to be the exceptionally low prevailing interest rates. Considering the fact that the Bank of Canada has obligated to maintain the historically low interest rates till the middle of 2010, there appears to be some sort of exigency among the buyers to finalize their property deals ahead of the interest begin to ascend once more. However, these buyers have one hope - it is unlikely that the interest rates will go up abruptly after mid-2010 since that will put many other aspects of the country's financial system out of place.
It may be mentioned here that in 2009 a realty firm Royal LePage had undertaken an annual assessment of people desiring to purchase recreational real estate properties. The survey found that a large number of Canadians were of the view that buying recreational real estate properties was an excellent long-standing investment. This logic has definitely whetted further keeping in view the prevailing instability in the equity market as well as the extremely low interest rates that restrict the income on majority of the safe fixed income savings. The survey particularly observed that approximately 64 per cent of the Canadian were of the opinion that owning a cottage was a very sensible investment, while another 55 per cent of people expressed their willingness to forego a few things, such as shifting to a smaller primary home in order to purchase a recreational real estate property and increase equity.
Considering the way of life of most Canadians, the safety problems as well as the rising expenses involved in travelling out of the country have in fact made the idea of 'staycations' more acceptable to the people. In addition, the increasing pressure on the existing major cities of Canada has prompted people to buy recreational properties with a view to spend their holidays away from the din and bustle of the routine urban life. Going by the latest census information, the urban locales of Canada have been developing fast both in terms of size and population. And if the census data is to be believed, like their predecessors, more and more new immigrants to the country will continue to establish themselves in major cities like Toronto, Vancouver and Montreal - places that are already overcrowded. In other words, it also denotes that the new immigrants will only contribute to the burdens on their infrastructural facilities at a juncture when the municipal authorities are already fraught with preserving the existing old facilities.
Hence, it is quite natural that most people would crave to break away from the congested urban locales. Some may even consider permanently shifting from these urban centers and settle down in lesser crowded places, especially those on a water front. It is envisaged that even the new immigrants would adopt this notion once they settle down and prosper in their new places of residence. In addition to these factors, many attribute the trend in the demographic shift that has begun to have an impact on the secondary residential real estate market is the passing on of riches and monetary resources from the Baby Boon generation to those born between 1965 and 1980 - the Generation X. A study undertaken on behalf of the real estate firm RE/MAX hints that nearly 75 per cent of the Generation X would mull over buying cottages. Incidentally, the percentage of such people was only 40 in 2008.
The survey particularly noted that the Generation X buyers contemplating to purchase recreational real estate properties and not doing it so keeping in view the investment aspect, but consider the second property as an important sanctuary for the family as well as an element for a balanced way of life. According to the findings of the research, this trend will enhance gradually as more and more people from the Baby Boom generation grow older and, in several instances, dissociate from their wealth and economic resources.
The reality that the Americans, who are still plagued by the economic slump, are no more a cause for the rising prices of recreational real estate properties and a powerful Canadian dollar are other aspects that are responsible for the new equilibrium of the cottage or country realty. In fact, in the present scenario a number of Americans are endeavoring to seek benefit of the difference in the exchange rates by selling their assets and moving out of the Canadian market. While it financing a recreational real estate property may be somewhat difficult in the prevailing conditions, as there is a remote possibility of the banks may permit the buyer to finance as much as 95 per cent of the property, the number of indigenous alternatives is plentiful.
It may be mentioned here that the possibilities of increasing the equity of your main place of residence are good. Therefore, a number of different deliberations may be relevant in case you mull over utilizing your principal residence as a rental property, albeit for a temporary phase when you are spending your time at your family retreat. In addition, another option is to purchase the recreational real estate jointly with a group of family members or friends. In this case, the syndicate may be prepared in such a manner that it encloses the effect of the capital tax gains.
All said and done, there is actually no price of enjoying the delights of a cherry sundown or the sight and sound of the freshwater birds and fishes. Therefore, when buying a recreational water front property, you are getting these gifts of nature, something unimaginable in the urban setups, absolutely free!
