Nearly half of Canadians thinking of buying a recreational property will do so despite concerns about increasing taxes, rising interest rates and new regulations requiring higher down payments on second homes.
According to a survey conducted by Angus Reid for Royal LePage Real Estate Services, 47% of Canadians who plan to purchase a recreational home in the next two years want to do so to improve their lifestyle.
A third of respondents said they would not have to make any financial or lifestyle changes in order to afford a recreational property. Only a quarter of potential buyers said their desire or ability to purchase a second property would be influenced by the new regulations by the Canada Mortgage and Housing Corp. requiring at least a 20% down payment on investment properties. And only 10% of respondents said a hike in interest rates would stop them from purchasing a recreational property.
“There continues to be strong demand for second homes,” said Phil Soper, president and CEO of Royal LePage. “Canadians appear prepared to make significant investments in order to enjoy their leisure time.”
The biggest concerns Canadians have about secondary homes are tax-related, especially in B.C. and Ontario. About 62% of Ontarians and 53% of British Columbians were concerned about the HST affecting their ability to buy vacation properties. Nationally, 46% were concerned about potentially increasing property taxes.
Soper noted tighter lending requirements, increases in taxes and expectations of higher interest rates may dampen the recreational property market. The survey found 43% of respondents said they would buy a vacation property because it was a good investment, down from 64% last year.
About 26% said they want to purchase a recreational property before interest rates start to rise.
For British Columbians, 53% said having waterfront or beach access was the most important feature of their recreational property, followed by four-season use (44%).