|A cottage by the lake remains the preferred choice of holiday home for Canadians. (photo: Shutterstock)
About half of all Canadians considering buying a holiday home cite potential tax increases as a concern that may affect their decision, according to a new survey.
Angus Reid conducted the online survey on behalf of Royal LePage Real Estate Services. It polled 1,003 randomly selected Canadian adults who are considering purchasing a recreational property in the next 24 months.
Forty-nine percent expressed concern about the impact of the new harmonized sales tax (HST) on new construction homes, while 46% said they were worried about increasing property taxes, the survey found.
Only one in four buyers said the stricter mortgage regulations that came into effect in April will reduce their desire or ability to buy a cottage. The changes require a minimum 20% down payment on any property that is not a primary residence.
Canada’s recreational property market is picking up after last year’s slump, though the pace of activity still lags far behind that of the rest of the housing market, according to a separate report last week.
The survey found the primary reason given by Canadians for buying a cottage was to improve their lifestyle. Less than half of respondents (43%) said they would buy a vacation property because it is a good investment; in a comparable Royal LePage survey last year, that figure was 64%.
Soper says this is a direct result of rising cottage prices. “The brave bargain hunters that purchased during the depths of the 2008-2009 recession have been rewarded by appreciating prices this year.”
Across the country, a cottage by the lake remains the preferred choice of holiday home, but its popularity is declining. Only 34% said it was the top option, compared with 68% last year.
The popularity of a condominium as a second home is rising rapidly, to 24% of buyers from 6% last year.
The most expensive recreational properties are in British Columbia, with prices starting at $345,000, followed by Quebec at $326,000. The most affordable properties are in New Brunswick, with entry-level prices from $65,000, according to the survey.
The price ranges for standard waterfront, land-access properties across Canada, based on a 3-bedroom, 1,000-square-foot cottage on a 100-foot lot:
Prince Edward Island: $180,000 – $200,000
Nova Scotia: $190,000
New Brunswick: $65,000 – $1,000,000
Quebec: $326,000 – $650,000
Ontario: $140,000 – $1,050,000
Manitoba: $189,000 – $360,000
Saskatchewan: $245,600 – $600,000
Alberta: $300,000 – $555,000
British Columbia: $345,000 – $1,500,000