Real estate conditions in Ontario’s cottage country these days are a far cry from the buying frenzy of the pandemic. BMO’s Robert Kavcic said in a recent note that demand is “fizzling fast,” and local agents seem to agree that once-booming pockets of the Lakelands region are now firmly under the thumb of inflationary pressures and interest rates.
According to the latest figures from the Canadian Real Estate Association, year-to-date waterfront sales across the region are down 5.1% compared to the same period in 2022, while non-waterfront sales are down 7.8%. Meanwhile, sales in both segments are hovering around 30% (give or take a few basis points) below their five- and 10-year averages (based on the month of September), indicating that demand is running below typical levels for this time of year.
“Everyone will have a different take on the statistics and a different view of the market, so talk to 10 different realtors and you'll probably get 10 different micro-opinions,” says Max Hahne, Broker and Private Office Advisor with Engel & Völkers International Realty who’s active in Collingwood, Owen Sound, Port Carling, and Muskoka.
Those nuances notwithstanding, Hahne tells STOREYS that the Lakelands region on the whole is “screeching to a bit of a halt” and leaning towards buyers’ market terrain. At the same time, sellers are fairly reactive amid the uncertain economic climate.
“I’ve been doing this for 40 years and every time there is a downturn in the market, people panic and tend to sell the vacation property first,” Hahne explains.
“What we're also seeing is a lot of listings coming on the market in what we call ‘the very high end.’ So, above $3.5M all the way up to $4M, $5M, and $6M. We're seeing more $5M and $6M listings than we've ever seen before.”
Ross Halloran, Broker and Senior VP of Sales for Halloran & Associates with Sotheby’s International Realty Canada, points out that Muskoka is faring better than some other cottage country markets (he points to Haliburton, the Kawarthas, Port Severn, and Parry Sound as markets that have seen a more pronounced slow-down) in that conditions are still somewhat seller-favourable.
But even so, Halloran says that property owners are having to reduce their prices quite dramatically as listings linger on the market and bring in “low-ball offers.” In some cases, prices are being slashed to 80% of list before buyers end up taking the bait, he adds.
Despite the fact that selling conditions are less than ideal right now, Hahne says that many cottage country property owners are choosing to take the hit and tap out anyway. He points to owners in the boomer generation in particular — those in their 60s, 70s, and 80s who are ready to downsize and won’t be passing cottages down to their kids.
“Their kids can't afford the taxes and utilities and maintenance with the way the economy is these days,” he says. “So there's a lot of that going on right now and that's what's keeping the market buoyant.”