Muskoka Real Estate Red-Hot as Buyers and Renters Turn to Cottage Country
UPDATE: As of June 5, the Ontario government has lifted the temporary ban on short-term rentals in the province, allowing cabins, cottages, homes, condominiums and B&Bs to resume operations.
With travel restrictions tightly in place, the cancellation of events, and shuttered patios throughout the city, the return of the sweet smell of spring just didn’t evoke the same collective sense of joy for Torontonians as it has in the past.
As it became apparent that summer 2020 would look drastically different in response to the COVID-19 pandemic, it also became clear that having access to any outdoor space was a luxury many city residents did not enjoy (if even just a balcony). The lucky ones this summer are those with backyards, while the really fortunate ones complete these yards with pools.
But those who find themselves on a whole other level of fortune this summer are the ones with access to a cottage in Ontario’s pristine – and very pricy – cottage country.
Nearly three months (and counting) of quarantine mode has rendered most Torontonians stir crazy at best, especially those confined to small spaces typical of the Toronto core. Facilitating cravings for both a change of scenery from the restraints of the sweltering concrete, and to reconnect with nature and its many benefits, the cottage country real estate market is red-hot right now.
And this has realtors north of the city breathing a collective sigh of relief.
“It was looking like we were going to have a catastrophically bad year in March and early April. On the rental side, I was looking at half a million dollars of cancelled reservations from people who lived in places like Europe and Australia,” said Sotheby’s Realty sales representative Maryrose Coleman, who is based in Muskoka’s Port Carling community and is also a co-founder of luxury cottage rental company Muskoka District Rentals. “The cancellations just kept coming in. On the real estate side, the Cottage Life Show had been cancelled in March, and many visitors actually come to that show looking to purchase a cottage. We always put a lot of time and effort into it, getting our listings and materials ready so that we’re there for prospective buyers.”
A second blow to the cottage country rental market came with Ontario’s COVID-19-inspired restrictions on short-term rentals that went into effect on April 4, banning any units in the province from attempting to rent for less than a 28-day time period. “We had to go and proactively change all of our rentals that were booked until the end of June,” says Coleman. Right now, the restriction is in place until June 25, but Coleman suspects it could be extended throughout the summer.
Toward the end of April and in early May, things started to shift, says Coleman, as eyes turned north to cottage country. “People were thinking about their summer plans and realizing that they weren’t going to travel, and we started to get a lot of rental inquiries,” says Coleman. “Many people were actually looking to book for one month, two months, or three months – which is not unusual – but normally those people book a lot earlier, like in the August or September the year before.” The cancellation of overnight summer camp heightened this demand. “I was literally slammed. I had 27 phone calls and 300 emails within an hour,” she says.
The demographic of cottage-seekers – both buyers and renters – includes everyone from double-income/no-kid millennial couples and young families, to retired couples looking to share a slice of Ontario’s north with their children and grandchildren for the summer months.
Usually, Jason Burke takes his two kids to an Ontario Park in the summer and rents a cabin. “This year, I want a little more privacy and don’t want to use shared facilities in light of the ongoing pandemic,” says Burke. “So I’m going to be looking for a private option, as opposed to the Ontario Parks choice. What I think I’ll do is rent a cottage that’s close to a provincial park, so I can still benefit from the offerings of the park, but stay with my family in our own space.”
Toronto resident Tristan Mackay entered the cottage market this season with his wife and 9-month-old son. “We started looking for a cottage given that we’ll likely travel a lot less for the foreseeable future,” says Mackay. “Plus, as everyone gets older and has families, the cottage invites are inevitably a lot less frequent, and more difficult to facilitate. So this seems like the right time, especially now that we have our son.” Mackay noticed right away that many of the most coveted cottages – those with the best views and exposure – are getting quickly snapped up. “The places that we recently visited have already sold,” he says.
The common theme among cottage-seekers for 2020, say realtors, is a sense of urgency to secure a piece of lakeside real estate for the summer – something that’s a contributing factor to the slim pickings for prospective buyers. “Looking at this year compared to last year, the inventory is low, and there are more buyers,” says Ruthann Brown, a realtor at Muskoka’s Engel & Volkers brokerage. “My thought is that there are would-be buyers who now don’t want to sell this year, because they want to get out of the city too. If they sell now, they’re stuck in the city. Then, of course, there are new buyers looking to get out of the city due to changes in potential travel plans and cancellations of summer camps.”
This urgency is so high, says Brown, that prospective buyers are opting to rent while they search for the right cottage just to lock in something for the summer (something that also clearly affects the dwindling rental supply). It’s also reflected in the amount of dollars cottage-seekers are willing to drop. “The prices have not gone up, however, there’s less willingness to negotiate down right now because of the limited inventory available of what today’s buyer is looking for,” says Coleman. “There’s a clear willingness for buyers to pay more for the right property than they would have before just to get something locked in. Anything ‘nice’ by today’s criteria – the urban lake house aesthetic – sells before making it onto the market.”
Not surprisingly, the most affordable properties are in incredibly high demand. “Anything under $1-million is flying,” said Joshua Chisvin, a sales representative for PSR Brokerage, which has a location in Bracebridge. “A lot of cottages under $750,000 are getting multiple offers and bidding wars, and anything under $2-million on the ‘big three’ (Lake Muskoka, Joseph, and Lake Rosseau) is also beyond busy.” He notices a similar demand in the rental market. “Many properties are seeing double the rent offered in 2020 compared to 2019,” says Chisvin.
The high-end Muskoka market – that obtainable to Toronto’s one per cent – has also been bustling, says Chisvin, very possibly in direct response to COVID-19. “The luxury market has seen an increase in attention from buyers and renters, ranging from $4-million to $20-million for purchase, as well as rentals starting at $45,000 per week,” says Chisvin. Given the probability that the restrictions on short-term rentals will last throughout the summer, that rental figure jumps to a cool $180,000 for the 28-day minimum in what we can only assume is a Muskoka mansion.
For renters with deep enough pockets, renting a cottage for 28 days takes little convincing. After all, while the office may remain closed for many, the workday continues remotely. For cottagers, “working remotely” could mean creating presentations on the dock or answering emails from a hammock – something that sounds pretty appealing after months of working from home workspaces in the city. “Tellingly, the biggest question I’m receiving is about internet quality,” says Brown.
The 28-day minimum – and the current uncertainty as to whether or not it will be extended – makes renting a cottage a little trickier this year, especially for those simply seeking a week or two-week long outdoor fix. Not to mention, social distancing measures mean that groups of unrelated people are out of the question (so, you may have to reconsider that annual ‘boys’ or ‘girls’ cottage weekend this year). “I’m now reaching out to my renters saying ‘this is what I see happening, this is how I see this playing out,’ and offering less expensive cottage options for the 28-night minimum, a refund, or a deposit towards next season,” says Coleman.
It should be noted that all of Coleman’s cottage rentals are undergoing extensive cleaning measures in light of COVID-19, and will sit vacant for three days between guests. Renters are also required to undergo health screenings and follow proper social distancing measures so long as they are at the cottage.
For renters, the lure of going “under the table” and renting from a law-breaking end user for a week on the lake is admittedly somewhat tempting. Coleman, however, warns that some people have not been able to get their money back when they’ve had to cancel a private booking. “It’s riskier to rent from an end user during these times than from a company that can more easily withstand the blow of the cancellations of a bunch of rentals,” says Coleman. For those in the market to buy this season, she recommends that you work with a local agent who knows the ins and outs of cottage country and its properties.
Either way, if you’re seeking a slice of lakeside cottage country real estate this summer, the time to act is now.