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
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.
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 are starting to see the Muskoka real estate market shift. From the frantic 2021 cottage market season right up until recently, holding offers until a specific date has been a popular strategy for sellers to drive up competition for listings. Listings were seeing a large number of offers and disappearing from the market quickly. Now we’re seeing more of a mix – some listings are seeing multiple offers, and some are quietly removing their request for offers when the day comes and passes with nothing.
One factor in the shifting market we’re experiencing is the Bank of Canada raising policy interest rates by 0.5% in April, one of the major goals of which was to bring inflation levels back to their target 2% (vs. the 6.7% reported in March). This is the first time it has raised rates by more than 25 basis points in more than two decades. Higher interest rates mean higher borrowing costs, which lowers demand. We expect interest rates will continue to be increased until borrowing costs are back to pre-pandemic levels of 3%. The next announcement is on June 1, 2022.
The 2022 Federal Budget also puts a few factors into play that could effect Muskoka’s real estate market moving forward. It focused heavily on housing initiatives, including (among others):
A foreign ban on buyers for two years
An anti-flipping tax that removes the principal residence exemption for properties that were purchased and sold within the same 12-month period (with some exceptions). The proposed anti-flipping measure would apply to residential properties sold on or after January 1, 2023.
Sales tax on all assignment sales. Starting May 7, 2022, anyone selling their agreement of purchase and sale to a new buyer will be subject to a tax of up to 26%
Does this mean the bottom will fall out and prices will go way down? Highly unlikely. Historically, we still have quite low inventory. It’s gone up from 2021, but properties are limited – especially waterfront. Plus, the already strong desirability of living in Muskoka has only increased after the pandemic. On top of that, there is still a large portion of the population approaching retirement age, who are looking to relocate to somewhere like Muskoka for their golden years.
If you’re a buyer, it’s time to shake off the fatigue of last season and get back to your cottage search – with less competition.
I have posted 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 I haven’t included please email me at len@cottageinmuskoka.ca. I’d be happy to send it to you!
Overall MLS Waterfront Market Activity
Source: The Lakelands Association of RealtorsSource: The Lakelands Association of RealtorsSource: The Lakelands Association of Realtors
Muskoka Waterfront Market Activity by Location
Muskoka Lakes
Source: The Lakelands Association of RealtorsSource: The Lakelands Association of RealtorsSource: The Lakelands Association of Realtors
Huntsville
Source: The Lakelands Association of RealtorsSource: The Lakelands Association of RealtorsSource: The Lakelands Association of Realtors
Bracebridge
Source: The Lakelands Association of RealtorsSource: The Lakelands Association of RealtorsSource: The Lakelands Association of Realtors
Gravenhurst
Source: The Lakelands Association of RealtorsSource: The Lakelands Association of RealtorsSource: The Lakelands Association of Realtors
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.
It’s not that there is anything wrong with Oakville. There isn’t. At least in my opinion there isn’t. I grew up there. I made lots of friends there. I have great memories there. I have family and friends still there.
I am, however, not qualified to sell real estate there. It is legal for me to do so, because I am licenced for all of Ontario. I don’t think it is ethical though.
My message, as the current President of the Lakelands Association of Realtors is to use a local agent. It is definitely in the best interests of the buyers and sellers. A Muskoka agent knows Muskoka. A Muskoka agent will make the process look easy, but be working hard in the background to make sure that all of the details are taken care of. Aspects that an agent from out of the area would not be aware of.
Does the land flood every spring? Water in the basement? Is the shore road allowance owned? Can the owner legally access the property. How about water quality? And weeds. Are there weeds? A few or a lot. Is the bottom firm and sandy, rocky or squishy? Fishing, boating. Can one navigate from this lake to another.
Help us to help you and please, choose a local realtor.
Royal LePage Lakes of Muskoka Realty’s Port Carling and Bala Offices Rebrand as Luxury Brokerage, Johnston & Daniel
Royal LePage Lakes of Muskoka Realty is excited to announce that as of December 6th, 2017, our Port Carling and Bala offices are rebranding as the newest offices of established luxury real estate brand, Johnston & Daniel.
Meeting the growing demand for luxury real estate in Muskoka
With the significant increase in demand for luxury real estate services in the region, Johnston & Daniel is the perfect offering for Muskoka’s real estate market. As a division of Royal LePage, Johnston & Daniel offers the service of a luxury boutique brokerage backed by the scale, synergy and credentials of Canada’s largest and oldest real estate company.
Clients will have access to an intuitive and custom-tailored experience and will benefit from a robust and collaborative real estate network, a hallmark of Johnston & Daniel’s culture.
Active clients can rest assured that we have taken great measures to plan and prepare for a seamless transition while remaining focused on their needs. Outside of re-signing documents under the new brand, current clients will not be affected.
We look forward to this exciting new chapter and the opportunity to serve Muskoka’s growing luxury real estate market proudly under the prestigious Johnston & Daniel brand.
About Johnston & Daniel
Since 1950, Johnston & Daniel has been representing the distinctive properties in Southern Ontario’s most affluent neighbourhoods. Offering caring, intuitive service and building long-term relationships, Johnston & Daniel is the standard of excellence in real estate.
