Market
Market
Muskoka Luxury Cottage Real Estate | Summer 2024 Update
Waterfront real estate in Muskoka has been trending downward for over a year, with one notable exception. Sales of luxury cottages, which peaked in mid-2021, began a steady decline until mid-2023 when they started to rebound. However, since March of this year, the decline has resumed and shows no signs of abating. The relative strength of the luxury market has kept the average price of the overall waterfront market elevated, but this recent deterioration could quickly change that.
Luxury Cottage Market
Cottage listings over $3,000,000 are generally concentrated on Muskoka's "Big Three" lakes: Lake Joseph, Lake Rosseau, and Lake Muskoka, with a few on Lake of Bays as well. This market segment has been somewhat insulated from interest rate increases but not from the Non-Resident Speculation Tax (NRST).
Impact of the Non-Resident Speculation Tax
According to the Ontario government "The NRST applies on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent residents of Canada) or by foreign corporations or taxable trustees. Effective October 25, 2022, the NRST rate is 25%."
Muskoka Luxury Cottage Sales | 2019-2024
This tax has effectively taken almost all non-Canadians out of the cottage market, as they would be paying 25% above market value on their purchase. This has significantly impacted the demand from foreign buyers, further influencing the market dynamics.
It is very important to note that many of the real estate brokerages in Muskoka sell their luxury properties via exclusive listings, not through Realtor.ca®. The data we publish is for closed transactions via M.L.S. as we do not have access to private or exclusive data. Most high-end transactions continue to take place on Lake Joseph, Lake Rosseau, and Lake Muskoka, with Lake of Bays also showing a solid presence in the upper-tier market.
Lake Joseph Waterfront Cottage Sales
Lake Rosseau Waterfront Cottage Sales
Lake Joseph Average Cottage Sale Price
Lake Rosseau Average Cottage Sale Price
As you can see by the charts, waterfront sales volumes have dropped dramatically while the average prices have remained fairly stable. Unlike the average cottage seller, owners of high-end properties tend to be in a better position to wait out the market. Very few fire sales occur on the "big three" which adds a degree of stability to the market. They are however, not immuned.
On the supply side, M.L.S.® listings for cottages have risen steadily this summer while potential buyer's are waiting on the sidelines. Right now there is over 14 months of waterfront priced over $3,000,000 and climbing steadily. The weight of supply / demand will, at some point in the near future, begin to bear on Muskoka's luxury segment.
Muskoka Luxury Waterfront Listings
Months Supply of Luxury Waterfront
