Tag Archives: Muskoka real estate market

Wearied Buyers, Your Time Has Arrived – Muskoka Spring Real Estate Report

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

Muskoka Real Estate Market information on waterfront properties for all of Lakelands North, which includes Muskoka and surrounding areas. Real estate sales activity, dollar volume, months of inventory both actual and year-to-date.
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors

Muskoka Waterfront Market Activity by Location

Muskoka Lakes

Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors

Huntsville

Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors

Bracebridge

Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors

Gravenhurst

Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors
Source: The Lakelands Association of Realtors

Ontario Real Estate Regulations Changing to Offer Alternative to Blind Bidding

Under the current blind bidding system, potential buyers submit offers without knowing the contents of competing offers. The seller’s agent must disclose the number of offers received to all other parties who have submitted an offer, but none of the details – whether price or conditions.

The new regulations coming into effect April 1, 2023 would allow sellers the option of an open bidding process. Blind bidding will still be allowed, but it will depend on what the seller wants. Should they chose to opt for open bidding, the brokerages who represent them would disclose details of competing offers.

The Ontario government says these new regulations will help to make the home buying process more transparent, bringing down the rapidly inflating cost of homes. Blind bidding does create an opportunity for sellers to drive up prices by signing back offers for a higher price, with the potential buyer left guessing how much (if any) improvement would actually be needed to beat out the other offers on the table. With that said, it’s hard to see why the majority of sellers would chose to have open bidding with blind bidding still an option. 

If this new open bidding process proves to be a popular option, it may increase trust between buyers and their agents  – there seems to be a common misconception that agents are the driving force behind not disclosing the details of other offers, when in reality it is the current law. A more transparent process would ease that mistrust – as well as the huge amount of fatigue buyers are feeling in the current market.

I personally don’t think this move will change much – blind bidding benefits sellers, not buyers – so putting the choice in the hands of the seller seems to point to an obvious outcome. 

There will be other changes to the Trust in Real Estate Services Act (TRESA) coming into effect in April 2023 as well: simpler standardized forms, and more disciplinary powers to the Real Estate Council of Ontario (RECO), the body in charge of enforcing rules for real estate salespeople and brokers.

August 2021 Muskoka Real Estate Market Update

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.