Ontario’s real estate market has been in a dizzying state since the start of the pandemic, especially in cottage country. Prices boomed over the last two years with some recreational properties jumping into the millions as buyers scrambled after cottages, looking for an escape from the city. But then travel reopened, events restarted, and the cottage market cooled.
The Canadian Real Estate Association (CREA) reported that in February, 29 waterfront properties were sold in the province’s Lakeland region, which constitutes cottage-heavy areas such as Muskoka, Haliburton, Parry Sound, and Georgian Bay. That’s a 62.8 per cent drop from the same period last year, and 51 per cent below the five-year average.
In part, the lack of sales is due to low inventory. There aren’t many waterfront properties on the market right now. This has kept cottage prices stable, sheltering them from the price correction happening in urban centres. But the market could change this spring as local realtors anticipate a flood of new listings to hit the scene.
If you’re a buyer looking to get into the cottage market, here’s everything you need to know about what’s happening in Ontario’s cottage regions.
Three hours north of Toronto, Muskoka’s known for its windswept pines, rocky shores, and luxurious cottages. But as the CREA reported, Muskoka is currently short on inventory. According to real estate broker Susan Benson, waterfront property listings in the region are at their third lowest in the last 10 years. This has caused a spike in prices.
“The median list price for January and February is up 27 per cent compared to last year at the same time,” Benson says. The median list price for a waterfront property in Muskoka currently sits at $1.7 million.
This median price, however, might see a dip in the next few months. Benson says that at the end of 2022, properties were sitting on the market for about 15 days. Now it’s closer to 47. “Buyers aren’t biting,” she says. With properties sitting for longer, sellers may have to lower their prices to make themselves more appealing.
“A property that is priced properly can end up looking like a bargain in a market with competing properties that are overpriced,” Benson says.
Plus, the spring season typically brings additional inventory, giving buyers more choice and control. “You should, as a buyer, be able to negotiate conditions that ensure a proper vetting of the property and confirm your ability to pay for it,” Benson says. “This was the piece that was missing at this time last year.”
Southeast of Muskoka is the Kawarthas, a chain of lakes that feed into the Trent River. Similar to its northern neighbour, the region is suffering from lack of inventory, which is keeping prices high. “I listed one last Wednesday and had four showings on it. I got two offers, and it still sold $30,000 over the asking,” says Greg Ball, a real estate broker from the area.
The average price of a waterfront property in the Kawarthas currently ranges from $700,000 to $1 million, depending on the size and location of the property.
Ball predicts that the rise of interest rates and the financial burden of variable mortgages might spur an injection of new inventory into the market in May, balancing out prices and reducing the chances of bidding wars.
“From past experience, when a recession-type market hits, you dispose of what you can,” he says. “Something like the cottage will come before the house.”
If you’re planning on shopping around in the region, Ball advises using a local realtor. “We went through three years of people buying from their Toronto agent, and I’m not knocking them, but we are now getting calls from those people that purchased in 2021 and 2022 that can’t get their money back because they bought in a poor area,” he says. “I just can’t stress how crucial it is to use a local realtor that knows the area.”
Bay of Quinte
A little west of Kingston, not far from Frontenac, is the Bay of Quinte, a long and narrow body of water that connects to Lake Ontario. Unlike the two previous regions, the Bay of Quinte is already seeing its inventory bounce back.
“We’re probably up 20 per cent since December, which is typical,” says local real estate agent Doug Peterson. “When you look at the waterfront market, it’s pretty predictable, seasonal up and down.”
He expects more properties to come on the market in the coming months. “I think a lot of sellers have been hesitating over the last six months just because of uncertainty, and now things are starting to firm up a little bit more in the economy,” Peterson says. “It’s still a little topsy turvy, but people can’t wait forever.”
The Bay of Quinte hasn’t seen any recent fluctuations in waterfront prices, with the average hovering around $800,000.
If you’re looking to buy in the region, Peterson says you should act quickly. “The market is pretty tight, and well-priced listings are starting to move fast. There is a little bit of urgency that’s come back into the market,” he says. “We went for a few months where buyers were able to wait and see, and now we have those people saying, ‘Oh geez, I guess I should have done something.’”
A little north of London on the sandy shores of Lake Huron is Grand Bend. The region is home to an iconic beach, making nearby cottages a hot commodity. But compared to 2022, inventory is down. “Last year, being a pandemic year, the situation was a little bit different, a little bit of a frenzied market. So, we’re looking now at more of a return to normal,” says local real estate broker Emily Carcamo.
As of the end of March, Grand Bend had 39 waterfront listings available with an average price of around $1 million. “That’s actually quite good,” Carcamo says. “If we’re looking at waterfront from Port Franks up to Bayfield, we’re looking at about 11 properties for sale where the average price is over $2 million.”
Grand Bend prices aren’t expected to see any drastic changes, but property on Lake Huron is a niche market meaning there’s always interest. In fact, the average sale price for waterfront properties in 2023 is 14 per cent higher than it was at this time last year. While days on market remains similar. In March 2022, properties sat for approximately 13 days. In March 2023, it increased to 15 days. This means properties are still turning over quickly.
The area has traditionally seen a lot of attention from baby boomers moving to Grand Bend post-retirement, but COVID has pushed an increasing number of young families out of urban centres in search of rural retreats. In many cases, they’re buying older, more affordable properties and renovating them.
“We are seeing more families leaving urban centres where prices were more expensive,” Carcamo says. “They’re re-evaluating their priorities in life and their goals, wanting to live in more of a rural setting by the beach where life is a little bit slower, a little bit more enjoyable—living that vacation lifestyle.”