Buyers "Exerting Their Newfound Leverage": Cottage Sales Slow, Prices Drop As Inventory Rises

The weather might be heating up, but June’s sweltering temps haven’t stopped the Muskoka market from cooling down as the Lakelands North region transforms into a buyer's paradise.

According to the most recent stats for the Lakelands North cottage country region from the Canadian Real Estate Association (CREA), decreased prices, increased inventory, and slow sales are all pointing to a buyer's market.

Let’s jump in with one of the most significant year-over-year changes: property inventory. At the end of June, there were eight months of property inventory, compared to a notably lower 4.6 months of inventory recorded in June 2023, with average days on the market rising to 28 days from last year’s 21. This is also up from last month’s average of 26.5 days on the market and 7.7 months of inventory.

On top of that, the average sale price is now $1,482,323, down 7.8% from last June. The current average also represents a sharp drop of over $100,000 from May’s average price of $1,583,529. However, stats show a 22.1% year-over-year increase in the median price for waterfront properties, which now sits at $1,099,000 — also up from $967,500 in May.

Photo via Sotheby's International Realty Canada

Still, according to Ross Halloran, Broker and Senior VP Sales, Halloran & Associates, Sotheby's International Realty Canada, we’ve clearly entered a buyer's market. “Increased property inventory, plus longer days on market stats combined with decreasing average sales prices, clearly demonstrate that buyers are exerting their newfound leverage in negotiating transactions in this challenging waterfront market,” he says. “Well-priced properties are still selling, but usually with several buyer conditions, like home inspection, finance, and lawyer’s approval in their Agreements of Purchase and Sale.”

On the sales front, things have also slowed down. Residential non-waterfront sales activity recorded through the MLS® System for the Lakelands region totaled 401 units in June 2024, down by a notable 17.7% from last June and 33.9% below the 10-year average.

On the water, sales also dipped to 130 units sold, a substantial decrease in waterfront sales of 23.5% from the same period in 2023. Meanwhile, there were 780 active listings at the end of June, up 37.3% from a recorded 508 listings in June 2023.

brown wooden bench on dock near lake during daytime Photo by April Barber on Unsplash

The verdict is in. According to a statement from Bonnie Looby, President of the Lakelands Association of Realtors®, it seems the capital gains inclusion rate increase was not the fire starter some thought it would be.

“There was some uncertainty surrounding the expectation that sales in cottage country would see a sharp upswing in advance of the changes to the capital gains inclusion rate, but in the end we didn’t see any material changes to demand,” said Looby. “Sales of both waterfront and non-waterfront properties are trending below year-ago levels as the summer begins. Sellers are still out in large numbers, but without a resurgence in buyer activity we’re seeing a continued increase in inventories on the market.”

Current market conditions show buyers will have more choice — and time — when shopping the Lakelands North region than they have in the past, but stats also show us moving into an increasingly unbalanced cottage country market, with average inventory at eight months — well above the goldilocks zone of four to six months, which typically indicates a balanced market.