As Baby Boomers age, Gen X is now driving activity in Canada’s recreational market, a new report from Re/Max says.
According to the report released Thursday, Re/Max brokers in 91 per cent of regions across Canada surveyed said Generation X is driving demand for recreational property, with 47 per cent of them owning or planning to own recreational property, saying the chance to pass it down in their family as a key motivation to buy one.
The report defines Gen X as those between 43 and 58 years old.
Re/Max also reports that half of the regions in Canada are now experiencing a more balanced market, where neither demand nor inventory is outpacing each other. That is leading to only a small predicted rise in price for recreational properties — 0.9 per cent in 2023, according to the report.
“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,” Christopher Alexander, president of Re/Max Canada, said in a statement.
“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.”
Just over 10 per cent of Canadians currently own a recreational property, the survey shows. A similar portion of Canadians are looking to get into the market. The majority of those who plan to buy don’t plan to use it for rental for income purposes.
Regional executive vice-president Elton Ash told Global News that Gen X is looking to get into the recreational market now to take advantage of appreciation and avoid paying more later, as some are receiving inheritance money from their parents and wondering what to do with it.
Another factor in the market is owners hanging onto their properties rather than selling it, limiting supply. A Leger online survey done for Re/Max between March 17-19 of over 1,500 Canadians found 42 per cent are holding onto their property in the hopes of handing it down to family members, while 56 per cent plan to put their property in their beneficiary’s name while they are still alive.
Ash said families are trying to figure out now how to keep property in the family to avoid future generations from being shut out from the market.
“Once it’s gone, it’s gone,” he said. “It’ll be very difficult to get back in.”