Thoughts on Dock building

As a cottage owner in Muskoka, there is a good chance you have had to have your dock repaired or replaced. If a new dock, or repairs to your current dock are in your plans for the future, there are a number of aspects to the project we would suggest you research and consider before committing to this expensive undertaking.

  • There are no Ontario Building Code (OBC) specifications for docks. Buyer beware!

 

  • Plans for a new dock or major repairs to an existing dock must be approved by the local Building Department. Most likely, a building permit will have to be obtained.

 

  • Before deciding on where to put your new dock, you will need to check with the local municipal Building Department regarding setbacks, permitted size, etc. You will also need to check on how your shoreline is designated by the Federal Department of Fisheries and Oceans regarding fish habitat. Your shoreline may need a special study to be undertaken by a specialist to determine what can and cannot be built.

 

  • If your proposed dock is intended to support a boathouse, single-storey or two-storey, you will need to have technical design and construction drawings, stamped by a Professional Engineer. The same Engineer that stamped the drawings is also required to physically inspect the finished constructed dock and certify that it was built according to the plans. This is required before the Building Department will issue a building permit for a boathouse. Use a Professional Engineer who has experience with designing docks in Muskoka.

 

  • Specifications for a dock can vary widely, as there are no OBC specifications. Some design elements (type of piling, grade and thickness of steel for pilings, cross-bracing, method of fastening dock decking to the underlying steel structure, etc.) are inherently stronger, and longer-lasting, than others. The stronger, the better, in order to withstand ice pressure and floatation effects during flooding.

 

  • The cost of a dock can vary widely, depending on the dock builder and the design specifications. Cheaper is usually not better. Obtain a few quotes, based on the same technical specifications. Check references.

 

  • Unless you are using stainless steel dock piles (or wood cribs), the steel piles will rust over time. The thicker the steel and the higher quality of steel, the longer the dock piles will last before requiring repair or replacement.

 

  • Floating docks are always an option, even with a two-storey boathouse on top of them. A floating dock will go a long way towards solving the potential damage issues associated with spring flooding. Note that floating docks also require a building permit from the Building Department.

 

  • If you are going to finish the inside of the lower level of your boathouse, you will want to consider installing air vents in the interior perimeter walls to allow the walls to more quickly dry out in the event they are submerged during flooding. This reduces the risk of mould and rot developing inside the wall cavity.

 

  • We strongly suggest using ceramic coated deck screws to fasten the dock deck boards (wood or composite) so that individual boards can more easily be lifted up for repair or inspection, without damaging the surrounding boards.

 

Why you need a REALTOR® more than ever in the internet age

These days, there are more options than ever when it comes to buying or selling a home or cottage. It seems a new website or sale-by-owner service is popping up every week. And while there is most certainly room for technology, progress, and a fresh approach within the real estate industry, this inevitably creates a lot of noise out there cluttering up your decision-making process.

Now may be one of the most important times to look to a professional Realtor(R) to cut through all of that noise and make the business of buying or selling your home a stress-free proposition. Our mission at Chestnut Park is to guide you through this process with the least interruption to you and your family’s daily life; this is the value and service a Realtor(R) can provide that the internet simply cannot.

Data Analysis:
The internet has revolutionized the real estate industry, and we certainly are thankful for all that it has provided from sharing listing information quickly and easily with our clients, to communicating with the office from the road. But with all of this free-flowing information, there becomes an endless well of data. Average home prices, inventory per neighbourhood, lake rankings, etc. Sure, the information is all out there, but are you reading and analyzing it properly? A professional Realtor(R) is trained to know exactly what data is relevant to your purchase or sale, and exactly how it applies to you.

Local Knowledge:
The web is in fact, a fantastic place to begin research when wanting more information on a particular neighbourhood; from lakes, to demographics, to walkability and lifestyle. And while there is a wealth of knowledge to be found online, including local forums and message boards, there is no substitute for a Realtor(R) who has worked (and in many cases lived) in a particular area for their entire career. Not only will they have the inside scoop on all the neighbourhood quirks, but they will be able to share hard facts about the local real estate market specifically.

Pricing:
If you are a home or cottage owner, chances are you have a fairly good idea of what your property is (or should be worth) based on things like what you bought the home for, how long you’ve owned it, how much (if any) work you have put into it, how much your next door neighbour just sold for, etc. But when it comes to selling your home, timing (and what the market will bear at that exact timing) is everything. A qualified Realtor will guide you through the pricing process by analyzing myriad variables such as comparable home prices, current interest rates, level of inventory, interest in your neighbourhood and/or school district and much more.

Hunting & Gathering:
If you are looking to buy a new home, the hunting and gathering stage is where a Realtor will save you the most time and energy. Instead of trolling online daily looking for a property that will suit your needs, your Realtor(R) will take this step off your plate, comparing and contrasting what’s out there, and sending you only what they know will work for your needs. A Realtor also has access within their own network to homes that may not yet be on the market. As for selling, a professional Realtor will come up with creative solutions to lure qualified buyers to your property. Which brings us to

Marketing:
When it comes to selling your home, marketing is perhaps one of the most important aspects of the process. How will you maximize the best offers if people don’t even know that your home is for sale? A Realtor will work night and day to market your home in the right way, from open houses to online and print ads, to wild and creative options to showcase your property in the right light.

Dispelling Myths:
Much like planning a wedding, or having a baby, buying or selling a home or cottage brings unsolicited advice and personal anecdotes out of the woodwork. Your neighbour may be convinced that home values in your area have gone up 10% since you bought, and your cousin may be insisting that you hold out until spring to list your home, but only a Realtor(R) will be able to give you the inside info on what will or won’t work for your particular circumstances.

Connections:
When it comes down to the transaction of buying and/or selling your home or cottage, there can tend to be a lot of moving parts. From real estate lawyers to home inspectors, and stagers to contractors, your Realtor(R) is plugged into a community of other professionals who support and enhance the real estate industry.

5 Selling Tips for a Hot Spring Market

 

If you are preparing to sell your home or cottage, you’ve likely been reading about (or at least thinking about) the impending flurry of activity in the real estate market in the spring. There’s something about a long, cold winter indoors that makes owners crave a change when the ground thaws and the trees bloom. If you are one of the many sellers preparing to put their home or cottage on the market this spring, here are just a few tips to keep in mind as you enter the selling process.

 

 

1. Find the Right Realtor(R)

This step is undoubtedly the most important, and should be one you are thinking about long before the time comes to put your home or cottage on the market. The perfect Realtor(R) for you should be trust-worthy, easy to talk to, and should understand your needs. Your Realtor(R) should help you with the following 4 steps (including pricing and marketing your home of course!). Don’t know where to begin with finding a realtor? Have a look at Our Approach to see if selling with the Gardiner Team is right for you. Think you can go it alone? Here are 7 reasons why you need a Realtor now more than ever.

 

2. Scout the Competition

What people often don’t realize is that the viability of their home or cottage sale tends to have more to do with what else is currently offered on the market than what they feel their property is worth. Buyers and their realtors will be quick to compare your property and its price against others of similar size, age, and location to determine a fair buying price. Do some research (along with your realtor) and be aware of your competition. Being able to highlight your property’s advantages in comparison to the rest of the listings out there will give you an edge in negotiations.

 

3. Prepare Your Property

Do not underestimate the value of a new coat of paint, a spotless garage, or an entirely staged home or cottage. A buyer’s vision tends to be limited when it comes to seeing themselves in your home or cottage, and even small details like smell, decor, or light could put them off right away. Work with your realtor or a staging company to place your home or cottage in its best light, feeling bright, fresh, and free of clutter.

 

4. Don’t Lurk

The selling process can, at times, be intrusive to your daily schedule. Buyers will want to come back for a first, second, or third look at a moments notice and you may find it bothersome to rearrange your plans to accommodate them. Although it may seem reasonable to want to hang around during an open house or a showing, do your best to leave during this time. Go over to a neighbours place or go for a walk. Buyers will feel less pressure and more freedom to look in closets, ask questions, and really get a feel for the place without a lurking owner.

 

5. Don’t Get Emotional

Buying and selling real estate is unlike any other business transaction in that it is undoubtedly an emotional one. Your home or cottage is your retreat from the world outside, where you’ve shared happy memories with friends and family so it makes sense that you see it in its most romantic light. It is tough not to place a heightened value on your home or cottage, but it is important not to take negotiations personally or to sneer at any incoming offers.

 

 

Feature image via Explorer’s Edge

Real Estate Market Update | Muskoka January- December 2018

Cottages in Muskoka

It became obvious as 2018 wound down that the recreational market place was not immune to what was happening on the broader economic front. Throughout 2018 borrowers in the Toronto and area market place were reluctantly pulling in their horns, forced to do so by rising interest rates and borrowing costs, mortgage stress testing, and a 15 percent foreign buyers tax. By the end of the year Toronto and area sales had (on a year-over-year basis) declined by approximately 15 percent and average sale prices were off by more than 4 percent. It is anticipated that 2019 will be a year of sluggish sales and some moderation in average sale prices, particularly for higher priced homes. The same market scenario will likely play out in recreational property markets as well.

 

Interestingly, sales volumes will to some extent be impacted by declining inventory levels. For example, in 2018, 1110 waterfront properties came to market in the combined Townships of Muskoka Lakes, Bracebridge, Gravenhurst, Lake of Bays and Huntsville, almost a 10 percent decline from the 1224 properties that became available in these regions in 2017. It is even more concerning when 2018 inventory levels are compared to 2016 and 2015. During these years 1419 and 1594 recreational properties respectively came to market. Between 2015 and 2018 inventory levels have decreased by more than 30 percent.

 

On Muskoka’s big Lakes (Lakes Joseph, Rosseau and Muskoka) the same pattern has emerged. In 2015 there were 515 properties listed for sale on the big Lakes. This year that number tumbled to 332, a decline of over 35 percent. The same is true for Lake of Bays and the big Huntsville Lakes, although that decline has not been as dramatic.

 

It is not surprising that with declining inventories, sales have also declined. Combined in the Township of Muskoka Lakes, Bracebridge, Gravenhurst, Lake of Bays and Huntsville there were 684 recreational properties reported sold in 2017. In 2018 that number dropped to 565, a decline of more than 17 percent.

 

There was a similar decline in sales on Muskoka’s big Lakes. In 2017 there were 220 recreational properties reported sold, a number that declined to 165 in 2018. This represents a 25 percent drop in sales, which is consistent with the decline in inventory over the same period. On the basis of percentages, the decline in sales of properties having a sale price of $3,000,000 or more was greater than properties having sale prices lower than that.

 

It is interesting to note that not only were there fewer higher priced properties that sold in 2018, but it took longer for these properties to sell in 2018. In 2018 all properties in this category sold, on average, in 66 days. In 2017, which was a record year for the market, all recreation properties sold, on average, in only 59 days. Between 2014 and 2016, recreational properties in this price point sold, on average, in 73 days. Days on market in 2018, therefore, were consistent with historical norms. Although days on market increased between 2017 and 2018, there was no difference in the ratio between sale price and list price. In both 2017 and 2018 all properties sold on average at 78 percent of their original list price, and at 95 percent of their final list price.

 

 

The Muskoka and area recreational market place is varied and not homogeneous. As a result, it is difficult to determine what happened to average sale prices in 2018 with any accuracy, especially given the categories of properties that have sold and the numerous recreational locations. But evidence indicates that the average sale price for properties reported sold on Lakes Muskoka, Rosseau and Joseph declined by 6.5 percent, from $2,211,372 in 2017 to $2,069,142 in 2018. If we include sales of properties (over $500,000) in the Lake of Bays and Huntsville region, the decline in the average sale price is approximately 7.5 percent, from $1,994,810 in 2017 to $1,843,627. Interestingly, sales data of all recreational properties combined, which includes lower priced properties, indicates a substantial increase in the average sale price year-over-year. In 2017 the average sale price was $450,000. In 2018 the average sale price climbed to $650,000, an eye-opening increase of 38 percent.

 

What does all this market information tell us? It appears to be giving us the same signals that the market is projecting in the greater Toronto area. Lower priced properties are very much in demand and when available are selling briskly, putting upward pressure on prices in this segment. The urban equivalent would be condominium apartments. In the greater Toronto area, average sale prices for condominium apartments increased by 11 percent. They are in demand primarily because they are affordable, even with the market pressures of increased borrowing costs and mortgage stress testing.

 

Under the prevailing economic landscape, the upper end of the market in the greater Toronto area has seen a considerable pull back, both in terms of sales volumes and average prices. The most recent data indicates a considerable decline in the sale of properties having a sale price of $2 million or more. In 2017, 3,435 properties were reported sold in this category. In 2018 only 2077 properties sold at this price point, a decline of almost 40 percent. Average sale prices for this category of properties declined by 8%. Although property sales in recreational markets in this price point are discretional to a greater degree than urban markets, they will not be entirely immune to these market pressures.

 

Notwithstanding these turbulent conditions, Chestnut Park’s Port Carling office managed to beat market expectations by exceeding the next closest competitor brokerage office by more than 50 percent in dollar volume sales. Chestnut Park’s sales representatives were responsible for more than $250 Million in recreational property sales. Given the lack of inventory and the market pressures that have been discussed in this Report, this is a sterling performance.

 

As we go forward in 2019 the market challenges that have been discussed will continue to be at play. 2019 will be a transitional year when less foreign capital, increased borrowing costs and stricter financing qualifications will impact the decision making of buyers and sellers. Added to these factors is the lack of inventory and supply in all price points, but especially properties having a value of less than $1.5 Million. As the year unfolds pricing will be the key to sales in the new normal that buyers and sellers of recreational properties will be adjusting to.

 

Prepared by Chris Kapches, LLB, President and CEO, Broker — with tweaks by Jim Gardiner, Broker

 

 

Muskoka Market Watch – September 2018

Muskoka Market Watch – September 2018

 

Number of Listings and Sales

Unit Sales Volume – Summary of Waterfront Single Family MLS® Listings and Sales for the last 4 years by area as reported by The Lakelands Association of REALTORS® in the Muskoka Market.

Muskoka Market Watch Chart 1

 

Sales by Price Range

Summary of Waterfront Cottage MLS® Listings and Sales for the last 4 years by area and price range as reported by The Lakelands Association of REALTORS®

The Cottage Sales by Year and Price Range

*Lake of Bays, Mary Lake, Fairy Lake, Peninsula Lake, Vernon Lake

 

 

Sales in May 2018

The Lakelands Association of REALTORS®

Lakelands property sales remain well below last year’s record levels in May 2018

  • chart 4
  • chart 5
  • chart 5

Sales of waterfront properties recorded through the MLS® System for the Lakelands region numbered 191 units in May 2018. This decreased by 42.1% from May 2017, which was a record.

On a year-to-date basis, waterfront sales totalled 492 units over the first five months of the year. This was a decrease of 39% from the same period in 2017.

“Activity remained quiet in May,” said Mike Stahls, President of The Lakelands Association of REALTORS®. “Having said that, with supply at historic lows it’s possible we may be looking as much at a supply story as a demand story. That idea is supported by the fact that listings are still selling quickly, and median prices continue to rise.”

The median price for waterfront property sales in May 2018 was $535,500, up 9.4% from May 2017.

The total dollar value of all waterfront sales in May 2018 was $140.7 million, falling 34.2% from the May record in 2017.

Summary – Sales by Housing Type
Category May 2018 May 2017 Year-over-year
percentage change
Non-Waterfront Residential 237 399 -40.6
Waterfront 191 330 -42.1
Includes transactions in all areas recorded by The Lakelands Association of REALTORS®
Summary – Median Price by Housing Type
Category May 2018 May 2017 Year-over-year
percentage change
Non-Waterfront Residential $340,000 $319,900 6.3
Waterfront $535,500 $489,500 9.4
Includes transactions in all areas recorded by The Lakelands Association of REALTORS®


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Detailed – Non-Waterfront Residential Sales and Median Price by Area
Non-Waterfront Residential
By Area Unit Sales Median Sale Price
May 2018 May 2017 Year-over-year
percentage
change
May 2018 May 2017 Year-over-year
percentage
change
Muskoka 81 153 -47.1 $365,000 $330,000 10.6
Haliburton 24 25 -4.0 $231,750 $209,000 10.9
Orillia 76 120 -36.7 $387,500 $390,000 -0.6
Parry Sound 41 86 -52.3 $275,900 $207,750 32.8
All Other Areas 15 15 0.0 $469,900 $302,500 55.3
Note: A percentage change of — indicates there were no sales in the same month one year ago.
Detailed – Waterfront Sales and Median Price by Area
Waterfront
By Area Unit Sales Median Sale Price
May 2018 May 2017 Year-over-year
percentage
change
May 2018 May 2017 Year-over-year
percentage
change
Muskoka 74 111 -33.3 $720,000 $600,000 20.0
Haliburton 40 57 -29.8 $470,500 $510,000 -7.7
Orillia 18 27 -33.3 $560,950 $610,000 -8.0
Parry Sound 44 111 -60.4 $412,500 $390,000 5.8
All Other Areas 15 24 -37.5 $525,000 $465,000 12.9
Note: A percentage change of — indicates there were no sales in the same month one year ago.

BOARD & ASSOCIATION INFORMATION

The area served by 800 REALTORS® who belong to The Lakelands Association of REALTORS® serving Parry Sound, 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, the Parry Sound area, Gravenhurst, Bracebridge, Muskoka Lakes, Huntsville, Lake of Bays and Haliburton. 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

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

Muskoka Cottage Market Watch – Jan-Apr ’17

– January-April, 2017
An in-depth look at the Muskoka real estate numbers by the Gardiner Team

Number of Listings and Sales

Unit Sales Volume – Summary of Waterfront Cottage MLS® Listings and Sales for the past 2 years, and this year to date as compared to last year to date, by area as reported by The Lakelands Association of REALTORS® and The Parry Sound & Area Association of REALTORS®.

 

Sales by Price Range

Summary of Waterfront Cottage MLS® Listings and Sales for the past 2 years, and this year to date as compared to last year to date, by area and price range as reported by The Lakelands Association of REALTORS® and The Parry Sound & Area Association of REALTORS®.

Muskoka Waterfront Cottage Sales by Year and Price Range

As reported by The Lakelands Association of REALTORS® and The Parry Sound & Area Association of REALTORS®.

 

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)