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Cottage is the new castle

Cottage is the new castle

It used to be a person's home was their castle. Now that castle appears to be the cottage, especially if it's by the water.

According to a survey released by Royal LePage, which is in the business of buying and selling real estate, the national average price for a Canadian waterfront recreational property, with land access, was $380,507 this spring.



The survey found that a quarter of Canadians are willing to pay more for recreational properties than their homes. The desire for a waterfront paradise is so strong, that the average price for a cottage has topped the national average price for a two-story house by around $40,000, Royal LePage said.

The soaring cottage prices are being driven by limited supply, and a mixture of young professionals and baby boomers eager to buy. Only 15 per cent of current cottage owners said they were likely to sell their property within the next three years, the report said. Furthermore, nearly 60 per cent of cottagers plan to will their recreational property to their family.

Phil Soper, president and chief executive officer of Royal LePage Real Estate Services, said prices show no sign of slowing down.

"The supply and demand economics are so far out of whack in the recreational property market, that it would take a fairly significant drop in demand to bring the market into balance," he said. "Until there is a change in our economic fortunes, we will see a healthy recreational property market in this country."

Surging cottage prices are increasingly excluding lower-income buyers, and forcing people to drive further from the city to their dream holiday spot, Mr. Soper said. The higher prices are also fuelling the construction of condominiums at recreational locations, something that is happening across the country.

Although the national average price for a waterfront cottage was $380,507, the report noted that sales in the most popular get-away spots - Grand Bend, Honey Harbour, Georgian Bay, Wasaga Beach, the Muskokas, West Kawarthas, Cranbrook, Kelowna, Vernon, Okanogan and Fernie - were fetching between $500,000 to above $1-million.

In British Columbia, cottages - also known as cabins - were the costliest in the country, averaging just under $1-million. Alberta was second-priciest at $900,000. Quebec and Ontario came next, at $483,333 and $454,960, respectively.

Mr. Soper said the Western boom is bring driven by the prosperity that part of the country is enjoying, along with a migration of people. "One of the primary reasons that property in Alberta is so expensive, particularly within driving distance of Calgary and Edmonton, relates to its scarcity relative to the wealth of its population."

He pointed to Sylvan Lake in Alberta, one of a handful of locations that is both near the water and driving distance from the city. "There are quite a few places that you can go and sit on the side of a mountain but in the summertime, people want to be near the water," Mr. Soper said.

Indeed, the poll found that the most important features for prospective buyers searching for a cottage were: a waterfront property, a lot with mature trees for privacy, and a large dock on the water.

"The rising prices are not surprising given the fact that there is a convergence of buyers entering the market - with urban professionals, young families and baby boomers all vying for properties with similar features," Mr. Soper said.

The Royal Lepage survey found that 78 per cent of Canadians who are looking or planning to buy a cottage in the next three years are young-to-middle age adults under the age of 49.

In 2005, a cottage cost $235,654, a 15.8 per cent rise from the 2004 national average of $203,441. However, a Royal LePage spokeswoman said this year's poll includes a number of new areas, particularly in British Columbia and Alberta, that have skewed the year-over-year comparisons.

The national average price for a chalet, defined as a being a half-hour away from a mountain base, was $413,694.

The poll of 529 randomly-selected people was conducted by Maritz Research between April 27 and May 8, 2006, and is considered accurate within 5 per cent either way, 19 times out of 20.


By ROMA LUCIW

Source: Globe and Mail

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