Generation X: finally showing their buying power in the property market
The recent RE/MAX report found out that Generation X became the most important buying force on the Canadian market with recreational property, replacing the aging baby boomer generation.
Who are the people in Generation X?
As you may have noticed, generations of the 20th century have been given fancy names by social scientists. It were the different political and cultural attributes of the period when a certain generation was brought up that influenced its members and gave the generation a name. While baby boomers (those born in the period of mid 40’s late 50’s) were the most active buying force until just a couple of years ago, most of them have entered or are just about to enter retirement.
Now the children of baby boomers (named as Generation X) have grown up and in their 30 – 40′s they are in a sufficient financial condition to purchase recreational property at almost any price.
The change is especially noticeable when you confront the first half of 2009 results to the 2008 results. Waterfront cottages, resort condos and all other kinds of recreational property products are now very popular among thirty-something buyers. This has been reported by 74 percent of markets surveyed this year. This compares with only 40 percent in 2008. From January till April 2009, the number of sold recreational properties decreased – at least two thirds of all surveyed markets showed such trend. But now, since the start of the new cottage season, many major centers are now reporting an intensive buyer activity.
The most important points of the report:
Most markets report reasonable supply, but in 18 percent of the markets the inventory levels for entry-level products are tight, as most of the activity was targeted in the lower-end. Younger buyers with families are now purchasing properties from older cottage owners, who in many cases own their properties outright. Numerous cottages in Canada are owned by Americans, who are presently taking advantage of the stronger dollar to cash out of the market. There are some exceptions of course, but we can say that American purchasers have in most cases disappeared. One of the known factors in the marketplace is pent-up demand. For example some buyers who had intended to buy recreational properties in the second half of 2008 decided to defer the transaction till the next year. The warmer parts of USA, such as Florida, Arizona, California or Nevada – this is where some older Canadians still want to purchase secondary homes. Although the Generation X purchasers are prepared to pay their hard-earned dollars for recreational houses, they still want to be sure they’ve negotiated the best possible outcome.
