Young Canadians are thinking about trading in their 600-square-foot condos for lakefront cabins.
Driving the news: According to a new Re/Max Canada report, 45% of Canadians looking to get into the housing market are planning to buy a recreational property, like a cottage, as their first property.
Younger Canadians are driving the trend: 54% of 18-to 34-year-olds say buying a recreational property is part of their long-term financial plans. Only 30% of Canadians over 35 years old said the same.
Why it’s happening: After a pandemic-era boom, the market for recreational homes has cooled, with Ontario cottage country hubs like the Kawartha Lakes and Orillia seeing double-digit price declines. That’s opened the door for young buyers who may not have the money for a $1 million house in the city, but can afford a modest cottage or cabin.
Brokers say that these buyers usually either live in these properties full-time (must be nice), or they rent them out while continuing to live (and likely rent themselves) in a city.
Why it matters: The interest in cottages and other recreational properties is a reflection of just how unaffordable home ownership has become in Canada’s major cities, especially for young people. In both Toronto and Vancouver, the income needed to buy an average home is almost double the city’s median household salary.
Condos have traditionally served as that entry point, but anyone looking to buy something with hopes of a healthy return on investment may be wary of the sharp downswing in their value over the past several years.
Our take: Cottages and other recreational homes often require a lot more money to maintain than traditional houses, which is a big reason that over a quarter of current owners are looking to sell. It may be a cheaper foothold into the market (and far more beautiful than a shoebox condo), but for young people without a tonne of cash to fall back on, these types of properties can quickly become a money pit. And you’d better be sure your work is going to let you stay remote for the long haul.—LA
