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megram - 55JulOttawa - Index

Your Finance
By Iris Winston
Dividing the Recreational
Property Pie
Long-time cottagers have tolerated the invasion of
massive homes, power boats and golf courses, but
skyrocketing property value assessments may be the
tipping point for another type of paradise
Things to keep in mind when owning a fraction of a luxury resort
Summer at the lake. Building castles
in the sand. Swimming with
the kids next door. Throwing
sticks for Fido. Boating and fishing.
Just being with the extended family.
Going to the cottage has long
been one of Canadians’ favourite pastimes.
Recalling summers at the
beachfront cabin that has been in the
family for several generations brings
back warm memories.
Those were the days. For the
lucky people who still have a cottage
in the family — even one with an outdoor
privy — they are days that come
around each summer for current and
future generations to enjoy.
But what about those who do not
have such a special place?
They may decide to rent a waterfront
property in a resort area for a
week or two. Depending on the precise
location, and where on the primitive-to-luxurious
ladder the property
sits, that could cost anywhere from
$400 to $4,000 or more a week.
With prices like this, some may
think that buying is a better option.
They will soon discover that a similarly
broad price range applies. And,
because waterfront property, particularly
in Ontario, is getting scarcer and
property prices everywhere are rising,
costs are shooting up.
“Demand for recreational property
has sent waterfront prices spiraling
upward,” points out the most recent
RE/MAX Recreational Property
Report in reviewing trends and prices
across the country.
According to the 2007 report
released on May 1, the top end of the
market appears to be gaining the
most. It points out that “luxury recreational
property sales are set to soar in
the coming months as affluent baby
boomers drive the demand for
upscale products from coast to coast.”
Teardowns, custom-builds and
major renovations are changing the
July/August 2008 • 26 • Fifty-Five Plus Magazine
shorelines of lakes and rivers Canadawide.
The limited inventory has contributed
to increasing prices in more
than half the markets across the country.
While Atlantic Canada still offers
buyers “the best bang for their buck,”
starting prices are over $500,000 in a
third of recreational property markets
and very few areas offer even basic
waterfront properties for less than
$250,000.
The alternative to investing in the
whole of a high-priced property is to
buy a piece of a luxury resort for part
of the year.
This fractional ownership — one
of the fastest growing trends in vacation-property
purchasing — is drastically
changing the face of summer
and winter leisure time at the cottage.
The fractional ownership concept
began outside the real estate market
with such items as airplanes and large
yachts that were too pricey for one
person’s budget but manageable