Recreational Property Marke...

CEP News) - As Canada's economy slows down, so too are the sales of cottage property across the country - welcome news for prospective buyers who have been shut out of the market for years due to unaffordable prices and limited supply.

For the first time in many years, an increase in supply of recreational properties and fewer overall buyers has led to a good selection of entry-level waterfront properties under $200,000, according to a Re/Max report.

Of 45 markets surveyed across the country, 91% are currently in a transition phase from a strong buyers market to more balanced conditions, the report found.

"We're coming off the longest period of economic expansion since World War II," says Elton Ash, regional executive vice-president of Re/Max Western Canada. "Recreational property values have appreciated beyond our wildest dreams across the country. More balanced market conditions are a welcome change for purchasers."

Some of the recreational markets where waterfront property under $200,000 can be found include: Parry Sound, East Kawarthas and Kingston, Ont.; Central South Cariboo, B.C.; Summerside, PEI; South Shore, N.S.; Shediac, NB; and the East Coast of Newfoundland.

However, just because Canada's recreational market is balancing off doesn't mean you can expect to find bargain-basement prices, noted Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada.

"The recreational market continues to experience solid demand - a trend that is expected to continue throughout 2008," he said. "The influx of new listings has yet to translate into downward pressure on recreational property prices. Prime waterfront properties, while more plentiful than in years past, will still command top dollar."

Buyers are also being lured to real estate investment opportunities in the U.S. as a result of the housing market meltdown there. The rise in foreclosures on American properties, coupled with a rise in the Canadian dollar, have opened up attractive investment opportunities for Canadians, particularly in Florida, Arizona, Texas and California, the report noted.

"For some purchasers, the move is strictly a short-term investment strategy with a pay-off at the end of the day, while for others, retirement is the main objective," Polzler said.

The report also found that younger buyers were a factor in 40% of recreational markets surveyed.