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50% of millennials are buying vacation homes

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Owning a home has been a goal for most Canadians for decades. Now, it’s almost synonymous with the idea of becoming an adult; almost a rite-of-passage ritual or milestone for each generation. Parents and grandparents and probably even great-grandparents all perceived owning a home as the ultimate achievement — a sign that they’d “made it” and held their own financially speaking.

Today’s millennials may feel the same draw to homeownership — some for similar reasons and others for very different reasons. No matter what the impetus is, mare finding less-than-affordable and volatile urban market conditions standing in the way of achieving their goals.

Undaunted and always creative in their approach to circumventing obstacles, over 50% of Canadian millennials are turning their attention to recreational properties to meet their needs. The trend of owning a small cottage in a rural, scenic area versus buying an overpriced, fixer-upper in the city seems to be a new buying behaviour that bears closer examination. Ultimately, millennials are becoming more likely to buy a vacation home than a primary residence.

The Research

A 2019 study of real estate buying motivations, shows that 40% of all Canadians and 56% of millennials are in the market for a recreational property. To better understand what is driving this trend, potential homeowners were asked why they want to own a recreational property. The top reason wasn’t surprising:

Affordability is the top consideration for purchasing a recreational property — vacation homes in most areas in Canada are still relatively affordable and offer a lifestyle perk that many adults want in a property that isn’t located in the city.

However, affordability didn’t trump a millennials demand for livability. Most millennials stated that they required both an affordable cottage in the country but, despite the more rural feel, the property had to include internet connectivity, access to water and/or mountains, recreational activities, and be close to towns with urban conveniences.

The Work-Life Balance

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For these younger buyers, homeownership was all about an improved quality of life and a better work-life balance. The idea was that they’d continue renting in the city, to be close to work and school, but would buy their recreational property in order to visit and, on occasion, live in their vacation home.

The ultimate dream was that most could eventually find work that allowed them to connect remotely and only occasionally commute to the urban office. This is one reason why internet connectivity and a recreation property within a two-hour drive to the city were considered top priorities.

Even buying recreational properties require creative solutions

Even though recreational or vacation properties are more affordable than their urban counterparts, the average price of a vacation home in Canada increased 5% over the last year to $411,000.

In popular areas like Ontario and Quebec, prices are even higher as young families compete with baby boomers for areas close to high-quality schools and medical facilities.

The solution: split ownership.

Millennials are combining cash with friends or family to buy better properties or empty lots to build rental units on later for extra income. Even inherited vacation homes are being divided to lower maintenance and other ownership costs.

While there are pros and cons to shared ownership — freedom, flexibility and a sense of family plus more planning, bigger down payment, however, there can be complicated legal issues — in many cases, this may be the only affordable option.

Others look at the purchase of a recreational property as a great investment opportunity.

Of the 30% of all Canadians that plan to use their cottage as a rental property or renovate to flip for a fast return, millennials are the most inclined to do so.

These tech-savvy homeowners also understand they can offset some of their expenses through programs like Airbnb and VRBO for short-term vacation rentals. This can generate additional income when the property is vacant making this a winning investment year-round.

Create a smart vacation property purchase plan

Small brightly coloured homes in a town

Millennial homeowners often embrace a minimalistic lifestyle but that doesn’t mean their small homes are destined to feel claustrophobic. This HGTV generation knows how to make a small space feel bigger by adding more windows for increased natural light, hang TVs and open shelving to free up floor space, and use expandable/multi-functional furniture to reduce clutter.

With smaller, environmentally friendly homes trending over massive-sized McMansions, choosing a compact cottage makes perfect sense to this earth-conscious generation. A simpler lifestyle in a remote location presents more opportunities for small renovation projects like updating the kitchen or bathroom, adding new light fixtures (with LED lights), or refinishing a hardwood floor. They are also anxious to enjoy the outdoors so adding a deck or patio plus a fire pit to sit around a cozy campfire at night are all ways to add a bit of sweat equity to a vacation home without breaking your back or bank account.

To increase energy efficiency and reduce utility costs, many opt to use renewable energy sources such as solar or wind power. In an out-of-the-way locale, roof or ground-mounted solar arrays or wind turbines are more accepted forms of energy than urban or suburban communities, so homes with these features are even more desirable. Climate- and budget-conscious millennials are more inclined to look for green options for everyday needs as well as regional rebate programs to help pay for them.

Final thoughts

With the 18 to 34 age group virtually locked out of pricey urban markets, owning a city property may be unattainable. But millennials are nothing if not resilient. With 33% of millennials indicating that purchasing an out-of-town property as a wise financial investment — surpassing the purchasing habits of Baby Boomers for the first time — it’s possible that the dream of homeownership can become a reality for young adults, after all.

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Serge Bojinski

Serge is the editor of, as well as a blogger and home improvement enthusiast. He lives by the motto: "eat clean, train dirty."