Tag: prices

Waterfront sales remain at average levels in September 2017

 

 

Sales of waterfront properties recorded through the MLS® system of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS® came in 25.3% below last September’s record. On a year-to-date basis, waterfront sales were down 14.4% from the first three quarters of 2016.

The waterfront figures for September 2017 stood in between the five and 10-year averages for the month of September.

“Sales of waterfront properties have slowed from record levels this spring to more normal levels over the summer and fall, in line with trends seen across the Greater Golden Horseshoe region,” said Mike Stahls, President of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS®. “That said, prices are up year over year on fewer sales, and months of inventory decreased again slightly over the previous month.”

The median price for waterfront sales was $489,500 in September 2017, rising 11.3% from September 2016.

The value of all residential non-waterfront sales in September 2017 totalled $55.4 million, edging down 1.1% from September 2016.

The total dollar value of waterfront sales was $154.1 million, down 7.9% from September 2016.

 

BOARD & ASSOCIATION INFORMATION

The area served by the more than 700 REALTORS® who belong to The Lakelands Association of REALTORS® serving Muskoka, Haliburton and Orillia, is located less than a two-hour drive north of Toronto, in the heart of Canada’s Cottage Country. There are several major geographical areas within the Association’s boundaries, including the City of Orillia, Coldwater, Gravenhurst, Bracebridge, Muskoka Lakes, Huntsville, Almaguin Highlands, Lake of Bays, and Haliburton Highlands. Each of these areas has a unique blend of properties ranging from residential homes in the City of Orillia and smaller towns to the rural areas in-between, as well as a mix of waterfront homes/cottages on the many rivers and lakes throughout our regions that range from the smaller entry level properties to the prestigious.

Real Estate Market Update | Muskoka January-June 2017

JULY 19, 2017

Cottage Market

In April the provincial Liberal Government proposed the Ontario Fair Housing legislation, a bundle of measures to make housing fairer and more affordable for Ontario tenants and buyers. Although the proposed legislation – now law related to tenants – will have an Ontario-wide application, the legislation to make housing more affordable for buyers has a narrow application, affecting what is known as the golden horseshoe. The northern boundaries of the golden horseshoe extent to southern Georgian Bay. As a result, the Muskoka and area region is not caught by the new legislation.

Specifically, the new legislation will impose a 15 percent of purchase price tax if the buyer is a “foreign entity”. In other words, if the buyer is not a resident of Canada or a Canadian citizen.  There are numerous exemptions, but since the legislation does not apply to buyers and transactions in the Muskoka and area market place, a detailed explanation of these exemptions is beyond the scope of this Report.

The foreign buyers tax has had an immediate and dramatic impact on the Toronto and area market place. Since April 20th when the legislation was announced, sales have dropped by more than 30 percent, and the average sale price today compared to the mid-April high of $949,000 is almost $200,000 less. Since even the highest estimates indicate that only 5 percent of all purchases in the Toronto area market place were by foreign buyers, the new tax should not have had the dramatic impact that it has had. The effect is clearly psychological more than actual, since none of the area’s economic fundaments have changed.

Since the tax does not apply to transactions in the Muskoka and area market place, it should be of little importance, except for the possibility of the psychological spill-over effect seeping into the market place from the lack of market activity in the greater Toronto area.

As of the date of preparation of this Report there is no noticeable impact of the foreign buyer’s tax in the Muskoka and area market place. The main concern for the area is lack of inventory of recreational properties for sale. At the end of June, the Muskoka – Haliburton Association of Realtors had only 766 available recreational listings. This compares with 1187 for the same period last year, a decline of 35 percent. In 2015 there were 1511 active listings.

The situation is similar in all regions. In the Haliburton Highlands listings are down by 35 percent compared to the same period last year (272 to 175). In Lake of Bays the decline is 37 percent (128 to 80) and on Muskoka’s big lakes the decline is a little better at 31 percent (343 to 236). In 2015 the inventory levels were even higher than in 2016.

It comes as no surprise that with declining inventories the pattern of sales is somewhat fractured. Overall sales of recreational properties for the region were up by 3.2 percent compared to June 2016. In May they were up by 12 percent.

Sales on Muskoka’s big lakes were up by 10 percent. In May the year-to-date increase compared to last year was 19 percent. On Lake of Bays sales increased by a stunning 47 percent year-to-date. In May the increase was 45 percent.

For the second month in a row the only region showing a decline in sales is the Haliburton Highlands. In May the year-to-date decline was 10 percent. The market posted a further decline of 9.3 percent in June. Since the Haliburton Highlands region has had the greatest declines in inventory this year, these declines in sale, are probably inventory driven rather than by a lack of demand.

It is not surprising that under theses market circumstances that average sale prices continue to rise. For example, in June the average sale price for all recreational properties reported sold (with a sale price of $500,000 or more) on Lake Rousseau, Lake Joseph and Lake Muskoka, Muskoka’s big lakes, was $2,318,465. This represents a 5 percent increase compared to last June’s average sale price of $2,213,371.

Notwithstanding these declines in inventory Chestnut Park and its sales representatives have outpaced the overall recreational market place. On a year-to-date basis sales are up by more than 7 percent compared to last year, which was the strongest year in the firm’s history, and the dollar volume of sales has increased by more than 27 percent.

For the time-being reduced inventory levels continue to put pressure on buyers, as they are being forced to pay more for desirable recreational properties. A phenomenon normally associated with the Toronto market place, namely multiple buyers bidding for the same property, is now more common in the region. Unless the market becomes impacted by the new provincial tax on foreign buyers, we can anticipate the market place continuing to tighten. At this point it is difficult to foresee what might drive sellers of recreational properties to bring their properties to market. After all, recreational properties are not traded for the same reasons as urban transactions. These sales are discretionary on the part of buyers, and driven by circumstances on the part of Sellers.

Prepared by: Chris Kapches, LLB, President and CEO, Broker

Real Estate Market Report | Muskoka, January – March, 2017

Chestnut Park News

APRIL 18, 2017
Muskoka Real Estate Update

 

As 2016 came to an end, the concern in the Muskoka and area recreational market place could be summed up in one word: supply. The lack of supply has become dramatically obvious in the first three months of 2017. Generally supply is limited during the early months of any year. Weather conditions, inability to access properties, and the disinterest of buyers usually means that recreational properties are not brought to market until April or even later. This report acknowledges that market phenomenon, and is simply comparing what was happening in 2016 against the first three months of 2017.

 

The Muskoka-Haliburton Realtor Association reports that during the first three months of 2017 it processed 1815 listings of all types. This is a decline of 15 percent compared to 2131 listings that were submitted by local realtors during the same period in 2016. The decline in recreational inventory is even more startling. At the end of March the Association reported 439 active recreational property listings, a decline of more than 40 percent compared to the 751 recreational property listings on the market last year.

 

The situation is even more dramatic in 2 of the three market places in which Chestnut Park’s agents are active. On Muskoka’s big lakes (Rosseau, Joe, and Muskoka) there were only 103 active listings at the end of March, a decline of almost 50 percent compared to the 200 active listings available to buyers last year. The situation in the Haliburton Highlands is no different. Last year there were 193 active listings, this year only 103, a decline of 47 percent. Although listings are down in Lake of Bays the decline is not as extreme as in Muskoka’s big lakes and the Haliburton Highlands. This year there were 59 active listings, last year 83, comparatively a moderate decline of 30 percent.

 

At this stage of the year we have limited recreational property sales data. What we do have does not indicate that there is a corresponding decline in demand. The Association reports that 101 recreational properties have been reported sold year-to-date, an increase of 15 percent compared to the 88 reported sold last year. On the big lakes there has been a marginal increase in sales: 21 this year compared to 19 last year. Sales activity in the Haliburton Highlands is marginally down: 27 last year, 25 this year. Only Lake of Bays has shown an appreciable increase in sales, although the actual numbers are small: 12 reported sales this year compared to 9 last year, an increase of 30 percent.

 

During the first three months of 2017 Chestnut Park’s agents were responsible for 25 recreational property sales, representing $27,875,500 in dollar volume. This result is our highest number of reported sales during this period in the year, and by far the highest dollar volume ever achieved. These numbers also demonstrate that demand remains strong. The next best year for sales was in 2012 and for dollar volume it was last year.

What to expect:

Unless something dramatic happens we can anticipate a very tight recreational market as 2017 continues to unfold. As forecast in the year-end report, we will begin to see competition for well priced, desirable properties.

 

That competition will not amount to the frenzied activity that has become the norm in urban environments like Toronto, but multiple offers will not be uncommon. This is brought out by the fact that agents have already experienced the multiple offer phenomenon on new listings and when acting for buyers.

 

The unknown factor that may have an impact on the Muskoka real estate market place will be the provincial government’s reaction to the runaway prices for properties in Toronto and area. The prevailing belief is that foreign investors and speculation are fuelling price increases. Legislation by the provincial government in either or both of these areas could have a cooling effect on recreational markets, even if the effect is due to a wait-and-see stance by buyers. Unfortunately by the time the impact of the tax is absorbed by consumers, the major part of the recreational selling season will be at an end. It is anticipated that the province will move to deal with exorbitantly rising prices in Toronto and area by late April or May.

 

Prepared by:Chris Kapches, LLB, President and CEO, Broker

 

 

Muskoka Real Estate Update / Jan-Dec 2016

Cottage-winter-sunrise-Huntsville-Susan-Brown
JANUARY 19, 2017

2016 was a remarkable year for recreational property sales in Muskoka and nearby seasonal markets. It is difficult to pinpoint the reason for this increase in sales activity. 2016 was the second year in a row that saw sales grow fairly dramatically. Some of the factors at play are the following.

Firstly, the Muskoka and area market place is in close proximity to the greater Toronto area. Sales of residential resale properties in the greater Toronto area have, in the last two years, exploded. Sales have been strong in all price points, including the high-end properties (properties having a value exceeding $2 Million). Prices have correspondingly also increased, creating an urgency to get into the market. Real estate has come to be viewed as an asset that will ensure that buyers are not outdistanced by the ever-increasing value of resale properties. In the greater Toronto area residential property values increased by 20 percent in 2016 alone. In addition, there is a strong belief, supported anecdotally and statistically, that the market will remain strong, especially real estate values.

This prevailing attitude is no doubt behind the rising sales of recreational properties, not only in the Muskoka and related market places, but even further afield. Ironically, the increase in sales volume is having a dramatic impact on supply, consistent with the urban market experience. For example, at the end of December, the Toronto and area market place had 50 percent fewer listings than at December 2015. That is unprecedented. The recreational market place is beginning to mirror Toronto.

Supply will, although not to the same extent, become a concern in recreational markets. In 2016 the Association that manages listings for the Muskoka, Haliburton and Orillia market places published the following statistics. In 2015 the association processed 10,149 properties of all types on its multiple listing service. In 2016 that number decreased to only 8,976, a sharp decline of over 11 percent. At the end of December, there were 1466 active listings. At the end of December 2015 there were 2,290, a decline of almost 36 percent. The recreational property supply has also diminished in a startling way. At the end of December there were only 423 recreational properties available for sale. One might assume that since the recreational market is not active in the winter months that there is nothing exceptional about this number. However, when compared to 2015, it does give rise to some concern. Last year there were 656 properties available for sale. A decline of more than 35 percent is remarkable, even in the slowest season of the year for recreational property sales.

Except for Lake of Bays sales of recreational properties were strong in 2016. The Association reported that there were 1301 recreational properties sold in 2016. This compares with only 1098 in 2015, an increase of almost 20 percent. In 2014 there were only 890 reported sales.
The strongest recreational market place in 2016 was the Muskoka big lakes, Lake Rosseau, Joe and Muskoka. There were 350 reported sales on the big lakes, a 20 percent increase compared to the 291 sales in 2015, and a remarkable 32 percent increase compared to the 266 sales in 2014. What makes these sales eye- catching is the fact that the most expensive recreational properties in the region are located on the big lakes.

There was a considerable increase in activity in 2016 on Muskoka’s big lakes for properties having a value of $2 Million or more. In 2016 there were 21 sales in this category on the Lake Joe. The average sale price for these properties was $3,960,142. These 21 recreational properties sold in 95 days following their list date, and they sold for 95 percent of their original asking price. In 2015 there were only 14 sales in this category on Lake Joe. Although there were substantially fewer sales, the average sale price for the reported sales of these recreational properties was $4,512,564. They sold in just 58 days, but at 93 percent of their asking price.

On Lake Muskoka there were 20 reported sales in this category. The average sale price was $2,971,000. These recreational properties sold in 81 days following their list date, and they sold for 97 percent of their original asking price. In 2015 there were 18 sales on Lake Muskoka. The average sale price was $3,585,805.

They sold in 74 days at 94 percent of their original asking price.

In 2016 there were 24 sales of recreational properties that sold for $2 Million or more on Lake Rosseau. The average sale price of these properties was $3,533,250. They sold in 63 days and at 95 percent of their asking price. In 2015 there were only 10 sales in this category. Their average sale price was $3,093,863.

They sold in 140 days and at 94 percent of their asking price.

Clearly sales improved dramatically on the big lakes year over year in the $2 Million plus category. In 2016 there were a total of 65 sales. In 2015 there were only 42, an increase of 55 percent. The highest sale price was achieved on Lake Rosseau at $11,400,000. Unfortunately, it is difficult to determine an average increase in price year-over-year. Sales prices vary depending on location, elevation, exposure, water levels and more. Based on all the available data it is safe to say that prices increased between 5 to 10 percent in 2016 as compared to 2015.

Sales increased in the Haliburton region. There were 366 properties reported sold in all of 2016. This compares very favorably to the 319 sales in 2015, a 13 percent increase. The increase in sales is even more dramatic when compared to 2014. In 2014 there were only 246 sales of recreational properties in the region, an increase of almost 50 percent.

Lake of Bays appears to be out of sync with the overall market place. While the Muskoka Lakes and the Haliburton Highlands had double digit increases in sales year-over-year, the increase in sales in Lake of Bays was marginal. In 2016, 119 recreational properties were reported sold, a less impressive 5 percent increase. The reason why Lake of Bays did not produce as strong a positive variance that other regions did is due more to supply than demand.

Chestnut Park continues to be the market leader in Muskoka. Chestnut Park’s Port Carling office exceeded the dollar volume of sales of its closest competitor brokerage office by 78 percent. 2016 was Chestnut Park’s most successful year in serving its buyer and seller clients.

As 2017 begins we anticipate that the supply of recreational properties will become the market’s major concern. Urban markets, particularly the greater Toronto area, began experiencing shortages during the later half of 2015 and throughout 2016. As we enter the new year the lack of inventory has become critical. Although this is not yet the case in Muskoka and area, it appears to be heading in that direction. Unless a plethora of new listings come to market in the spring, we can anticipate substantial price increases, and multiple o ers on properties as a regular occurrence.

prepared by: Chris Kapches, LLB, President and CEO, Broker

(photo is provided by Susan Brown)