According to the recent RE/MAX report, Generation X is taking over the recreational property markets in Canada this year, replacing the aging baby boomer generation as the most important buying force.

Generation X – what does it actually mean?

As you may have noticed, generations of the 20th century have been given interesting names by social scientists.  Dating of a certain generation depends on all the various political and cultural features of the period that influenced the upbringing of members of that generation.  The baby boom generation, that are people born from mid 40’s till late 50’s, was the most active buying force, or at least until only a couple of years ago. But now the majority of these people have retired or are preparing for it. 

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 confrontation of this year’s results with last year will make this change particularly visible.  The trend moving towards recreational property buyers in their 30’s was reported by 74 percent of markets in this year’s surveys. The recreational properties sold varied from waterfront cottages to resort condos.  It is a significant change, confronted to the 40 percent in 2008.  Out of all the surveyed markets with recreational property, two thirds reported a decline in the number of units sold in the period from January till April 2009.  But now, since the start of the new cottage season, a lot of major centers are now reporting an increased buyer activity.

Highlights of the report:

Most markets report adequate supply, but in 18 percent of the markets the inventory levels for entry-level properties 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 often own their properties outright.  A lot of American cottage owners in Canada are 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. Pent-up demand is a factor in the marketplace, as those buyers who had intended on buying recreational properties in the latter half of 2008 delayed their purchases to 2009. Florida, Arizona, California, Nevada and other warmer parts of USA are the places where older Canadians still continue to demand secondary homes. Buyers from the X Generation are now mainly prepared to spend their hard-earned money on holiday houses. But at the end of the whole transaction, they want to be sure they’ve gotten the best possible result out of it.

It might be all of the financial troubles here in the UK. Even more folks are searching for a second home that they can use for cheaper vacations or to let out during the rest of the unused year. A lot of people have indeed managed to escape the UK and jet off to sunnier climates by buying overseas property.

Choosing to follow this route is becoming even easier, no matter what age group you are, you can still buy new property or even move abroad, however, whatever you do, you will still need to protect your new investment. Finding a company that will give cost effective cover for second home insurance and overseas property insurance isn’t as easy and can often be more costly than you might imagine.

Searching for second home insurance that suits your needs can be an expensive and tiring chore. That’s due to the fact that these second homes could be left unoccupied for extended periods, especially during winter with the associated risks of burst pipes and freezing damage. Even if you are able to overcome those problems, it can still become stressful when the property is damaged by the current occupiers.

If you do obtain cover you will probably find that most holiday home or buy to let insurance policies have restrictions in the small print. Unless you comply absolutely to the letter with security and occupancy requirements, you may be shocked to find your insurance is invalid when you make a claim. Although they may be hard to find, there are some providers out there that understand that as it is a second home, it won’t be occupied all year round.  

Because of this reason, there are some policies available that won’t end up leaving you with no water or electricity as they have no restrictions or exclusions in the small print. In the end, if you do decide to rent out your new property, those policies also come with extra things like protection against your content if it is damaged by the current guests.