Atlantic Tides

Recreational Property

The volatility in the stock market and the historically low rates of interest currently paid on term deposits put the real estate sector at the forefront of investment options. There is a great deal of security in owning a tangible commodity like real estate to diversify one’s investment portfolio; especially given the historical increases in value over the last 40 years while providing a hedge against inflation.

People see not only the safety of properly selected real estate, the potential for significant capital gains to be made on real estate acquired in these times, but also the enhanced lifestyle enjoyed by the owner that is immediately available and may be shared with friends and family today and in future generations.

Market Drivers

Trillions of dollars will be inherited by “boomers” over the next 10 plus years, which will facilitate the desire to own recreational property. The desire to own recreational property is universal, continuing to grow where as the availability of oceanfront property is most certainly finite.

While the Baby Boomers are the dominant part of the demand, sustaining that demand will be the children of the Boomers, known as the “Echo Boom”. There are 79 million Boomers in the United States and they had 76 million children, making the Echo generation almost as big a demographic force as the Boomers themselves.

Baby Boomers are aggressively investing in their future - both in terms of lifestyle and investments. Born between 1946 and 1965, this cohort represents approximately 33 percent of Canada’s population and control approximately 45 per cent of its wealth. Collectively, they own $230 Billion dollars in real estate assets and have a net worth of approximately $530 billion.

Demand is accelerating, according to a recent poll conducted by GMAC Residential Funding of Canada Limited. The survey shows that one in seven Canadians (14%) currently own a vacation property and that one in four ( 28% ) want to purchase one.

Certainly, one segment of the boomers have retirement in mind, many others, however, are looking for a second home where they can spend more time with their friends and family. Many families are inclined to not only create memories today, but to also leave a legacy for future generations. Given historical gains in recreational property, the investment aspect of a purchase certainly plays an important role in the decision making process, giving people confidence to purchase today.

Royal Lepage commissioned a survey that found Canadians still love the idea of going to the cottage and using recreational property as an investment, with 61 percent of existing and prospective cottage owners saying that buying a cottage is a better investment that buying stocks, bonds or mutual funds.

Recreational property in Nova Scotia and Prince Edward Island is amongst the most pristine and affordable in Canada. Throughout the world, Canadian recreational property markets are considered to be undervalued and world class.

Compared to similar properties in the U.S., Europe, Ontario, Quebec and Western Canada - property in Nova Scotia and Prince Edward Island are extremely competitive, often selling for far less than half of similar property elsewhere.

The Company