On October 23, 2024, the Bank of Canada dropped its interest rate by 0.50%. This brings the rate down to its lowest level in years, and it’s going to shake things up in the Muskoka real estate market. So, what does this mean for you, whether you’re buying or selling?
Why the Rate Cut?
Canada’s inflation has dipped to 1.6%—well below the Bank’s target. With weaker consumer confidence and rising unemployment, the Bank is hoping this rate cut will give the economy a boost. Lower rates mean cheaper borrowing, which is great news for the housing market!
If you are a Seller, this may mean that there are more Buyers qualifying for your property. Perhaps there will also be less competition. Potential Sellers who were worried about having to sell, may have some relief now.
Potential for Higher Offers
With buyers qualifying for larger loans, there’s a chance they may make higher offers on your property. This is especially true in competitive markets where multiple buyers are vying for the same home.
Should You Act Now?
It is a great time to act. For Buyers – before all the other Buyers hit the market and drive prices up again.
For sellers, listing your property could be a good plan. But, it depends on your situation. Please rely on your personal needs and the advice of a Muskoka real estate professional – we are always available to you.
Next Steps
Lenore and I are here to help you with your own unique situation. We provide personalized, professional and exclusive care. We are REALTORs with Johnston and Daniel Rushbrooke Realty Inc., and we’re here to guide you through the process.
Please contact us, and we’ll start your specific plan. Our timing is your timing, whether you want to take action today, or in five years from now.
Best regards,
Catharine Inniss REALTOR Johnston and Daniel Rushbrooke Realty, Brokerage
I was just reviewing some great, simple rules to follow to enjoy and use money well. These are rules shared by Brian Buffini. I follow these rules to the best of my ability.
I have found that Brian Buffini is a great coach. What makes a great coach? In my view, it is someone who has been there and is now sharing ideas and methods to be able to replicate the success that they have had.
Brian is someone who started out poor and broke and quickly realized that broke is a state of your bank account and can be temporary. Poor is a state of mind and one needs to change that with education.
So here are some ideas to secure your financial future:
Understand yourself and understand that you are not alone. Over 80% of people avoid thinking and talking about money. They are afraid of managing money and afraid to look at where they stand because they don’t have a plan and are afraid of losing their money. Trust me – it ends up being much scarier not to look.
People worship money. They spend a lot on lottery tickets – and the odds are so much better betting on yourself.
Change how you feel about yourself. Your status is who you are, not what you have. So that takes some internal work. But trust me, it feels great to nurture yourself in the right way. Fill the hole with good thinking, not money. Feel good about yourself.
Secrecy – embarrassment and shame. You have made mistakes. Your biggest mistake is thinking that you are alone. People in the Financial Services industry say that you would be surprised at how many people avoid looking at their financial situation and taking the reins. You are definitely not alone! And not embracing your finances creates conflict with your partner, if you have one.
Confusion. How much advice is out there? And how many sources are credible. You have to think of what the net worth of the person who is providing advice happens to be. Are they just making money from writing the book, or do they have a healthy and thriving net worth?
Follow a high performance mindset – Knowledge is power and ignorance is bankruptcy.
Money is a tool to be respected. It is just a tool, but you need to know how to take care of it, and how to use it.
You need to have a grounded identity. Money cannot buy character.
Clarity and alignment – what do you want money to do for you and is it aligned with your values? How are you spending your time and what do you believe. Take the time to figure this out, so you don’t end up in the wrong destination.
You need a path to follow. Run on the right track.
STRATEGIES FOR STABILITY
Defensive and Offensive
Defensive:
Working home budget to pay down debt, will, automatic savings and one month reserve.
Offensive:
Invest in yourself, build equity in your home, establish your retirement fund.
The former stability strategy stays in place for the rest of your life, no matter how wealthy you become. It is your platform for stability and security.
STRATEGIES FOR SUCCESS
Defensive and Offensive
Defensive:
Go from reducing your consumer debt, to having no consumer debt, automatic savings, and three to six months reserve. Fully fund your retirement fund.
Learn to live on 70% of what you make, save 10%, give 10%, invest 10%.
Offensive:
Get to 50% equity in your home at least.
Increase your revenue. Figure out how to make more money. Promotion at work, a side gig, real estate investments, (67% of millionaires made their money investing in real estate), stocks and bonds.
STRATEGIES FOR SIGNIFICANCE (Giving back)
Defensive and Offensive
Defensive:
All real estate holdings paid off. Your real estate is safe from repossession if it is paid for.
Establish a trust.
Have passive income to support you until you are 100 years old.
Offensive:
Give money and time to charities and causes that you are passionate about. Time first, money second.
If you own a business, set it up so that it is true legacy.
I think Brian Buffini has some great, tried and true ideas. What do you think?
A good accountant can help you set this up. Please let us know if you need a referral to an accountant.
Despite matching the lowest activity in over 20 years, the massive, media-predicted price reductions never came to pass in 2023 for the Muskoka recreational market. On the surface, the sales data suggest that prices increased by roughly 10% from 2022 to 2023. However, activity at the highest end of the market skewed these numbers and illustrate why “average price” is often more instructive to where the sales are occurring, in this case, in the high-end of the market, rather than providing a general statement on the entirety of a market.
We saw, an additional seven properties, with an average price of $12,000,000 sell in 2023. These sales alone increased the average price by over $200,000 and further reminds us of the limitations of benchmarking a fragmented and relatively small market such as Muskoka waterfront. Normalizing for these extremes, the numbers indicate that prices fell by high single digits – well off the 30% figure cited in the headlines. The fire sale that many buyers were waiting for never occurred and sellers looking to ride the pandemic market wave were met with growing inventory and tentative buyers. The market entered firmly into a more balanced “give-and-take” between sellers and buyers.
Inventory
Inventory grew to levels not seen since 2019 and tripled that of the historical lows from the last half of 2020 to the first quarter of 2022. With more choices for buyers, the multiple bidding phenomenon cooled substantially in 2023, curtailing the main inflationary element we saw during the pandemic. While the pandemic saw the a surge in investment cottage buyers, we did see the return of the more traditional cottage buyer this past year. They acted quickly and decisively when they came across the unique combination of features and price they sought. Unlike in 2008 and the early 1990s, buyers are still very much engaged and able.
Through the last half of 2020 to the spring of 2022, monthly sales matched the number of monthly active listings resulting in an overheated market and unprecedented price increases. 2023 saw the return to a more normal correlation between sales and inventory.
Annual Unit Sales – Over List vs Under List Price
Although sales matched a 20 year low, 14% of sales, in 2023, resulted in a sale price over the list price. We can infer that the majority of these sales were either in a multiple bid scenario or that a multiple bid was anticipated by a determined buyer.
Post Pandemic Pricing Table – Muskoka Recreational
The pandemic market brought an end to the sub $500,000 price point. Entry level cottages are now in the $700,000 plus range. On a percentage basis the entry level saw the largest year over year increases during the pandemic.
If you have any questions or want more specific data about your Township, please email me at cath@cottageinmuskoka.ca!
Muskoka’s waterfront economy creates over one billion dollars in income annually. It is necessary for the survival of local residents, as well providing substantial support to all tiers of government. The Muskoka Real Estate Market is a huge contributor to that waterfront economy.
Muskoka offers a unique respite for Greater Golden Horseshoe residents, along with celebrities and wealthy vacationers from around the world. The recent trend of telecommuting has allowed more cottage owners to live and work in Muskoka.
Close to 2,000 Muskoka lakes glitter in the sunlight and have been attracting people from around the world for hundreds of years, and indigenous people for thousands of years before that. Cottage owners and tourists bring much needed money with the summer boost in population. The permanent population is almost 67 thousand and the seasonal population is about 80 thousand, bumping the summer population up substantially.
The Muskoka market is unique due to the limited number of sales as compared to other markets, eg. the GTA, the vast variety of offerings, from small residential to multi-million dollar waterfront, and the consistent glut of buyers.
The topography of Muskoka and its waterways, and the very necessary restrictions on building, limit the number of waterfront homes that will ever be available. The buyer pool never wanes, but steadily increases.
The market may be going through a somewhat volatile period, but overall value in Muskoka remains stable. Big picture – steadily increasing prices over time, with the occasional market adjustment.
As we love to paraphrase – “they’re not making any more land”. Or lakes in the foreseeable future.
OVERALL MUSKOKA MARKET STATISTICS
As we head into the busy Muskoka summer market, we are seeing a somewhat dramatic increase in newly listed properties, as well as several properties that did not sell last fall or over the winter season. Price adjustments are once again becoming common, as sellers face the reality of a market that is becoming more balanced. We are seeing numbers that are similar to those in 2020. We expect values to even out over a five year period. Those sellers who are finding themselves in a position to sell after owning their property for a short time are going to feel the pinch. We are seeing some properties listed that were purchased at elevated prices during the pandemic. It is doubtful that they will resell at the same or similar price without having made any improvements.
The following numbers compare April 2023 with April 2022.
Overview of the current state of the Muskoka Real Estate Market:
Average price of a 2023 waterfront dwelling is $1,836,756.00 versus $2,199,562.00 in 2022, showing an adjustment of -16.5%.
Muskoka Lakes Township
Average price 2023 waterfront dwelling is $2,694,658.00 versus $3,515,088.00 in 2022, showing an adjustment of -23.3%.
Median price of 2023 waterfront dwelling is $1,749,000.00 versus $1,550,000.00 showing an adjustment of +12.8%.
Days on market this year average 25, last year average 26.
This is moving to a more balanced market.
Bracebridge
Average price 2023 waterfront dwelling is $754,675.00.00 versus $869,250.00 in 2022, showing an adjustment of -13.2%
Median price of 2023 waterfront dwelling is $660,000.00 versus $830,500.00 showing an adjustment of -20.5%.
Days on market this year average 37, last year average 6.
Gravenhurst
Average price 2023 waterfront dwelling is $930,000.00 versus $2,524,120.00 in 2022, showing an adjustment of -63% ** (please see below for explanation)
Median price of 2023 waterfront dwelling is $930,000.00 versus $1,350,000.00 showing an adjustment of -31.1%.
Days on market this year average 22, last year average 18.
Huntsville
Average price 2023 waterfront dwelling is $861,000.00 versus $779,861.00 in 2022, showing an adjustment of +10.4%.
Median price of 2023 waterfront dwelling is $780,000.00 versus $260,000.00 showing an adjustment of +200%.
Days on market this year average 94, last year average 23.
**
Gravenhurst’s -63% is alarming until you realize that this is based on two sales only, and therefore not statistically significant.
To summarize, sale prices are down slightly overall and price adjustments are becoming more common.
Your local, experienced, competent realtor has access to individual, specific, sold listings to help you determine value as you buy and sell Muskoka real estate.
View from Hazelwood Trail, Port Carling, Muskoka, Ontario
You have decided that this is the year. It’s all about buying a building lot in Muskoka. Now is the time to purchase that Muskoka land and realize all your plans and dreams to build! But what do you need to know? How can you protect your investment? What comes first?
WHAT DO I DO?
Here’s a short list of order of priorities:
Choose the area(s) you are interested in. Have a look at a Muskoka map. Read about Muskoka online. Are you considering a cottage waterfront property on the Big Three – Lake Joseph, Lake Rosseau or Lake Muskoka? Alternatively are you considering an off the grid, off the water property near Algonquin Park? A small lot in Gravenhurst, Bracebridge, Huntsville or one of the smaller towns? Consider length of drive, topography and ease of access.
Choose your REALTOR. This is a very important step. Do you know any agents? Do you have an agent in your area that you have used? Ask them if they can refer you to someone they know and respect in Muskoka. This is very important. You want a REALTOR who knows the area and who you can trust. This is a big investment in your future and you need the proper support. Don’t be afraid to speak to several Muskoka real estate agents. Ask about their area of expertise. An agent who specializes in homes in downtown Gravenhurst is not the same as a REALTOR who sells waterfront property on Lake Rosseau. You’ll get a feel for who is the right one for you.
Discuss scoping out the area with your REALTOR. Can she suggest drives/areas to visit to make sure that you love the area as much in person as you do online. You could arrange to see some properties at the same time as you are getting a general sense of the area.
If you will be financing the lot, speak with your mortgage broker. If you do not have a great mortgage broker, ask your Muskoka agent to suggest one or two. This is another relationship that you will rely on, so you need to have a competent person who knows the ins and outs of lending, and realizes the unique aspects of borrowing in Muskoka, as well as being a person with whom you “click”. Access to the lot will be key here, as well as many other Muskoka-centric issues. Remember it’s a big investment. No question is too small. Our goal is to manifest profoundly beneficial outcomes to buyers and sellers of real estate in Muskoka. It is so important to us that we made it our (Cottage in Muskoka) Mission Statement. Give your purchase the respect it deserves and make sure everyone else involved does too.
If you are not looking for a mortgage, but plan to use equity in your current home, contact your favourite lender and put the wheels in motion to free up the cash. Finding your dream property is not the time to start arranging financing. Borrowing for vacant land can sometimes be trickier than borrowing for a house/cottage.
Choose a property and fall in love with the land. Have your REALTOR secure the property for you, with a Conditional Offer. A due diligence clause will give you time to find out important details about the property. Too often buyers want to do their research and then make an offer and by the time they have their ducks in a row, the property is gone. Your REALTOR will be able to give you information about zoning and what the restrictions are. The township will have some rules about where on the lot and what you are allowed to build. You’ll want to know what is nearby, particularly if it could have a negative impact. Like a dump or if it is on flood land, to name just a couple of issues. You will also want to know if a site plan is needed, who will do that for you and what the approximate cost will be. There will also be building permit fees. Your Muskoka REALTOR will handle all of this for you.
Consider as many scenarios as you can. Do you want to build in a few years (is this for a second home/cottage?). Will the township allow you to bring a trailer to the property to enjoy it for a period of time before you build? Or did you want to have a trailer there permanently and resell in years to come? Do you want to build a traditional structure? A tiny home? A container home? (some jurisdictions don’t allow these yet).
Was the property recently subdivided? Will you be responsible for paying HST? Your Muskoka REALTOR will help you with advice on this. Is the land severable? Would you want to go through the process of doing that, either right away or someday? This would be good to know for building placement as well as investment income.
Buying property in Muskoka can be a lot of fun, and a very rewarding endeavour financially. Imagine being able to actually physically enjoy your investment. Other than taking your money out of your investments and throwing it around your living room and rolling in it, this is the only way to actually enjoy your speculation in a very real way. Talk about making memories!
We have seen some changes in the Muskoka real estate waterfront market since May/June of 2022. Muskoka cottage sales seem more familiar – aka “normal.” There are very few frantic bidding wars.
Days on Market are longer – averaging 14 for June versus 10 for May. It is still a seller’s market.
Overall there are fewer listings on the market, but just slightly. We had 604 new listings in June. May added 702 listings. Compare that to June 2021 with 645 new listings and May 2021 with 674 new listings.
The median price across the board for June 2022 was $715,000.00 compared to a median price of $650,000.00 in June of 2021. May median price was $744,590.00 in 2022 and 656,000.00 in 2021.
Interest rates are expected to rise 75 basis points on July 13. The government wants to control inflation as a priority. Curbing record 7.7% inflation is key to a healthy economy. As important as that is, fewer buyers could qualify for mortgages, thus slowing real estate sales.
Bank of Canada is expected to adjust the size of its hikes to 25 basis point increments or lower in October and December, taking the rate to 3.25% by year-end.
The BoC is expected to pause on rate increases throughout next year even as the Fed carries on raising rates. Bank of Canada predicted inflation would ease to 2.5% in late 2023, putting more money in buyer’s pockets and freeing up cash flow to accommodate cottage purchases, and the gas to get to them.
The housing market, meanwhile, has already shown signs of a rapid slowdown, albeit after eye-watering double-digit rises during the past two years during the pandemic.
“There has been some offset from the large pile of savings accumulated during the pandemic and that’s kind of cushioning the inflation pain,” said Sal Guatieri, director and senior economist at BMO.
“But eventually that will wear off and we will see high inflation curbing spending even more dramatically in the year ahead.”
We are cautiously optimistic that the rise in interest rates will not slow the cottage sales market. There is a very large buyer pool still waiting for their chance on a relatively small amount of inventory.
A recent survey showed a median 35% chance of recession within a year. It is predicted to rise to 40% over the next two years.
We have posted a file of the relevant stats for overall waterfront market activity and waterfront market activity by location below, for our more analytically minded friends.
If you’re looking for non-waterfront stats or anything else that we haven’t included please email us at cath@cottageinmuskoka.ca or len@cottageinmuskoka.ca. We are able to provide statistics at any level of detail that you like. We’ll be happy to send them to you!
So that’s it – that’s what’s happening in the Muskoka real estate market July 2022.
We hope that there were lots of good highlights for you in 2021 and that you were able to enjoy a rich holiday season.
Winter is historically a slower time in real estate. Comparatively speaking, this has been a strong late fall/winter season so far. Overall sales volume is down somewhat, but that is due to few sales, which we attribute to lack of inventory. Individual sale prices are up from last year and continue to trend upwards.
Please see the individual charts for Muskoka and please feel free to contact me at 705-801-2304 for more details on anything you have a particular interest in. We have the stats at our fingertips and our job is to help you decipher them.
Muskoka Lakes:
Huntsville:
Bracebridge:
Gravenhurst:
Have a wonderful start to what promises to be a wonderful year – Happy 2022 Everybody!
As the leaves turn colour and slowly fall to the ground, Muskoka turns to the fourth quarter of the year and embraces a strong real estate market. This fall we are comparing statistics from last September to this September and analyzing the activity from July to July, September to September. Despite the traditional slowing of the market as we face the end of the year, average prices are up (over one million), and the real estate market remains strong in Muskoka. The market has made a slight shift to normal, but still leans heavily in the seller camp.
Median sale price overall is up! This is across The Lakelands, which includes Muskoka, Parry Sound, Haliburton and Orillia.
The Gateway to Muskoka is a popular destination for cottaging and year round living.
The Bracebridge median price is slightly lower than Gravenhurst, but up from last year, which set records.
Huntsville median price is close to $700,000.00. Huntsville has a good combination of non waterfront and waterfront properties.
The median sales price in Muskoka Lakes is over one million dollars. There are plenty of lovely homes and cottages here.
RESIDENTIAL SALES IN MUSKOKA
Today’s snapshot –
There are 278 active listings for a total asking price of $406,536,876.00 The average price is $1,462,363.00. Average days on the market is 59, which is longer than we have recently seen.
There are 67 closed listings for a total price of $70,490,210.00. The average price here is $1.052,093.00. Days on market – 24.
Conditional sales total 29 for a total price of $22,346,700.00. The average price is $770,576.00. Days on market – 56.
Pending sales 237 for a total price of $257,328,494.00 with an average price of $1,085,774.00. Days on market – 33
Overall lack of inventory in Muskoka and the Greater Golden Horseshoe is keeping prices strong. There is a shortage of single family homes, cottages and rental properties. Muskoka continues to be a much sought after destination.
Dollar Volume of Sales Down 20.4% in Bracebridge from this time last year.Inventory Report July 20Inventory Report July 2020
Muskoka is a unique, highly sought after and magical place. There are many different kinds of buyers and sellers here. Some merely want a little piece of paradise to escape and camp out in the woods. Others want a mansion on one of the ‘Big Three’, or one of the 2200+ lakes in the district.
And the rest of us are somewhere in between. Waterfront or not, permanent residence or not, we all appreciate being surrounded by water and granite and pine and to do a little swimming, boating, hiking and star gazing.
The privilege can be costly, especially since the pandemic.
Overall prices are up year over year, and have gone up a median value of about $350,000 for waterfront properties since the beginning of 2020.
There were 499 new listings in July and 377 sales. The average DOM (days on market from listing to sale) is 14. Last year the average DOM for July was 23. July 2019 24. July 2018 was 30. We are seeing a trend here.
In terms of dollar volume:
There were 44 sales in Muskoka Lakes. 37 were waterfront and 7 non waterfront. The total dollar volume was $95,220,518.
There were 57 sales in Huntsville. 19 were waterfront and 38 non waterfront. The total dollar volume was $41,870,436.
There were 31 sales in Bracebridge. 10 were waterfront and 21 non waterfront. The total dollar volume was $21,252,027.00.
There were 29 sales in Gravenhurst. 7 were waterfront and 22 non waterfront. The total dollar volume was $19,314,650.00.
There is only a 2.5 month supply of residential properties available currently. The definition of supply refers to the number of months it would take for the current inventory of homes or cottages on the market to sell. Historically, six months of supply is associated with a balanced market between buyers and sellers and a lower level of months’ supply is considered a seller’s market and therefore they can expect to sell faster at a better price. In any market a substantially overpriced property will linger. The key to proper pricing is listing at a reasonable price and encouraging competition. Buyers will only compete when a property is appealing both in terms of features and price.
The trend has been toward less inventory for the last few years – with the exception of a small spike this year due to sellers wanting to cash in on this crazy market.
We do not see the ‘bubble’ bursting. We do not think that there is a bubble. It is a case of supply and demand. And those demanding having a lot of liquidity right now, due to many months of not spending in restaurants, on travel, services like spas, house cleaners, clothing, commuting etc. Interest rates remain low. Cottage buyers for the most part have not been negatively impacted financially by the pandemic.
Inventory has been relatively low for the past several years and we can see why when we look at the relatively low total number of cottages versus the potential buying pool. The Golden Horseshoe has a population of over 7.8 million. Say you considered just one percent of that number – that is 78,000 people in the market for a cottage. And that doesn’t count international buyers or buyers in the rest of Canada.
Some buyers are interested in purchasing to rent their places out. There is a lot of money to be made, but buyers should beware. For those who are perking up their ears, these purchases tighten off an already limited supply. Carefully vet your renters. Property damage is a real risk, as is annoying the neighbours with loud and boisterous behaviour. Enough of that, and the townships may decide to ban rentals.
Looking for an edge to protecting your Muskoka property? We endorse this excellent program being delivered in Muskoka this summer. Please call us if you have any questions or need any help.
2021 Natural Edge Program
MWC has received funding through Watersheds Canada to deliver The Natural Edge Program in the Muskoka area this summer!
The Natural Edge Program guides landowners through every step of the shoreline re-naturalization process, from planning to planting. It empowers property owners to restore their shoreline, protect their water quality, and create habitat for wildlife and pollinators using native trees, shrubs, and wildflowers.
Participants in The Natural Edge Program receive:A free site visit to discuss shoreline concerns, provide recommendations, and assess planting conditions; A personalized planting plan, including photos of selected planting areas and ideal plant species; Free resources to ensure that the newly planted vegetation thrives in the first few years of establishment and growth; and Follow-up and support with your new plants. And for landowners wanting to get a jump on planting their shoreline, there are a limited number of Shoreline Re-naturalization Starter Kits available for a low cost, which include:50 native plants including trees, shrubs, ferns and wildflowers Coconut fibre mats to deter grass from growing around new plantings Tree guards for all deciduous trees Mulch for the wildflowers and ferns Plant Care Guide with instructions on how to take care of your new plants Habitat Creation Guide Wildflower Garden Guide If you would like to receive a site visit this summer, you can sign up at https://www.muskokawatershed.org/programs/the-natural-edge/.
