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 firstname.lastname@example.org. I’d be happy to send it to you!
I hope that you are all doing well, and coping with self isolation. These are certainly trying times for all of us. We are are all in the same situation with different circumstances. Some of us are coping well and some of us are finding self isolation very challenging, and most of us are somewhere in the middle, with good days and bad days, good hours and challenging hours.
I am continuing my theme of kindness for April. I say that kindness is the new black, and everyone needs to choose to wear it. Kindness applied to yourself first, will contribute to your strength and resolve. Self care will spill over onto others, and afford you the ability to help those around you.
Start with the outward display of kindness – taking good care of yourself. A routine is recommended by experts and will give you some structure to your day. Some days you will just be in survival mode, some days you will actually feel like you are accomplishing something.
Reach out to your friends and clients. Share your positive energy. And when you need some positive energy, reach out! A phone call checking in on clients and expecting nothing in return will help them and make you feel good. Do all the good deeds you can, from the safety of your own home.
Life is definitely not normal now, but that doesn’t mean that we cannot be grateful for the good things that we do have, and reach out when we need help. Please call me if there is anything I can do for you. We are all in this together.
Catharine Inniss 705 801 2304
Lakelands Association of REALTORS® Board of Directors, President 2020
Catharine presented a cheque for $800.00 that she is donating to the Interval House in Bracebridge. In addition to this local Muskoka support, Catharine has donated another $800.00 to the Royal LePage National Shelter Foundation.
The Muskoka Women’s Advocacy Group (MWAG) operates two 24-hour crisis shelters for abused women and their children – Muskoka Interval House, in Bracebridge and Chrysalis in Huntsville, which also offers supportive transitional housing units for vulnerable women. Muskoka Interval House and Chrysalis are 24-hour women’s crisis shelters, serving Muskoka.
Catharine has chosen to to support this important charity every year: “I appreciate the opportunity to give to such a worthy cause, right in our community. Bentley appreciates the opportunity to enjoy some sunshine in Muskoka. After jumping for joy, he jumped on Joy”.
We had 5 successful Muskoka entrepreneurs present a history of their businesses, the successes and challenges, to the crowd.
Jan Nyquist of Pipefusion – stable floating docks that last, and anything else you can imagine made from polyethelyne pipe. Amie Colquhoun of Axiom Audio -Loudspeakers; the most exciting, realistic sound experience on the market, designed and built in Muskoka. James Solecki of Integra Lighting – the finest level of lighting design, custom installation and service to the Muskoka marketplace.
Don Waddington of Cottage Spot -Canadian source for the cottage products that you are looking for; with delivery right to your door.
Wendy Hogarth of Johnston’s Cranberry Marsh – Fabulous cranberries, fun destination, fantastic wine.
These presentations were informative and inspirational to say the least. Would-be entrepreneurs in the crowd soaked up many tips and advice offered by these generous people.
In the afternoon everyone thoroughly enjoyed something called the Innovation Sandbox. As it turned out, 13 people qualified for this event. Each had 5 minutes to “pitch” their business ideas and then were questioned and offered advice to a maximum of 10 minutes. Great fun, and some terrific people, ideas, and pitches.
The three with the combination of the best pitch and most viable businesses were awarded prizes ( an IPad, BlackBerry Playbook and a $250.00 Staples gift certificate).
I was invited by John McCaig Vice President of Probus Huntsville to talk about the work of the Muskoka Watershed Council and detail the 2010 Report Card. We had a good session with many, many questions.
According to the surveys, and as I asked prior to the presentation, there was very little prior knowledge about the Report Card or even the Muskoka Watershed Council itself. Afterward, I was very pleased to see many positive comments about the presentation with most people commenting that their knowledge of the watershed and good stewardship practices was increased substantially. It certainly makes it worthwhile.
Thank you to everyone in attendance, I enjoyed it immensely. -Steve