HUNTSVILLE, ONT. -- The economic concept of supply and demand is alive and thriving. Look no further than recreational property or chat with a small town homeowner and the numbers speak for themselves. Prices have been on fire.
According to Phil Soper, president and CEO, Royal Lepage, "from coast to coast, the line between primary residence and recreational property is blurring.“
Housing in the recreational regions of Ontario and Atlantic Canada are forecast to see the highest price appreciation in the country this year. According to Royal LePage, it stands at 17%. Those provinces are followed by Quebec and British Columbia, higher by 15% and 13%, respectively.
The pandemic has proven many can work from anywhere, anytime, and bricks and mortar no longer matter as much. The focus shifted last summer when travel was restricted, businesses were shut down and some people realized pretty quickly they could do their jobs just about anywhere.
As prices above the asking price continue to climb, it has become frustrating for potential new homeowners. Economists on Bay Street fear a bubble is forming in the housing market and The Bank the Canada has their eye on the situation as inflation creeps a little higher.
Real estate has caught the attention of many.
To be fair, real estate has been a pillar of strength in our economy and we needed that. Yet, along the way, the pandemic has glamourized cottage life and clearly made it more desirable, while rates are at rock bottom and supply of homes has been dwindling.
And let's not forget we have been accumulating a lot cash—in excess of $200 billion—itching to be spent in many cases on a down payment.
The pandemic has shone a light on how we want to live, where we want to live and even who we want to work for.
For the younger generation, those between 25-35, when given a choice -- 47% would now choose small town or country living, while 45% would prefer to live in a city, according to the survey. Meanwhile, nearly 2/3 of millennials surveyed say the ability to work for an employer that allows the option of remote work is important.
When you are living in the moment and working remotely, it is easy to see how our mindset has changed. What I worry about is today's thinking and its alignment with that of your employer, tomorrow.
Flexibility is going to be required by both parties. And like the blurring of primary and recreational property, there will also likely be a blurring of work from office and home.
Working remotely is so much more than high speed internet. So before you take the plunge, consider life after vaccine herd immunity.
Before you consider transitioning your recreational property to your primary residence, a pause might be worthy. Life might not be like it is a year from now. That doesn't mean don't do it -- it just means don't look at big lifestyle changes through rose-coloured glasses.
Finally, when it comes to pricing, here is one thing I know about bubbles -- It is easy to get caught up in the moment and be fearful of missing out. No one really knows for sure if we really are in a bubble yet, and when they burst, they burst fast and furiously.
