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Muskoka Real Estate | 2025 Market Outlook for Cottages & Homes
Waterfront Real Estate
Cottage Market Trends
The cottage market in Muskoka has always been divided between low to mid-range and luxury properties, but in recent years, this gap has expanded dramatically. Current market forces are intensifying this division, creating notable disparities in how different price segments are performing. As outlined in our 2024 market outlook, waterfront properties priced under $3 million remain the most susceptible to price erosion, while the luxury segment above $3 million has shown impressive resilience.
Since the 2021 peak, unit sales for cottages under $3 million have dropped by approximately 65%. In contrast, properties priced over $3 million have seen a more moderate decline of 44%. This divergence is even starker over a longer timeline: when adjusted for inflation, luxury cottage sales align closely with long-term historical averages, while cottages in the lower ranges have dropped nearly 50%.
It is important to note that some 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.
Changing Landscape
Days on market—a key metric in our forecasts—have steadily risen in Muskoka since January 2022 for lower-priced cottages, with luxury properties following in early 2023. Currently, waterfront properties average nearly 60 days on the market, double the duration from 2022. Muskoka now has approximately 10 months’ worth of cottage inventory, a level not seen since mid-2016.
A significant number of cottage listings have had price reductions, providing insight into the market’s direction. During the COVID buying surge, properties sold at slightly above asking prices, but now they average around 7% below asking—a 13% swing. As sellers adjust to current market conditions, this gap should narrow toward a more traditional 5% under asking.
Notably, cottages priced over $3,000,000 account for nearly 40% of total waterfront spending on the MLS® this year, up by 25% from 2020. This trend can create a perception of stable prices in Muskoka; however, the high-end market's strength is largely propping up the average, masking softening in lower price segments.
There is a difference between the Average Cottage Price in Muskoka and the Price of an Average Cottage in Muskoka.
Muskoka Cottage Sales under $3,000,000
M.L.S.® Only - Does not include Exclusive or Private sales
Muskoka Cottage Sales over $3,000,000
M.L.S.® Only - Does not include Exclusive or Private sales
What we see coming for cottages .....
We anticipate a stronger initial wave of seasonal inventory this year, as sellers adapt to evolving market conditions and aim to list early. For cottages under $3,000,000, we expect moderate price softening, with properties priced below $1,500,000 and those on less popular lakes showing particular vulnerability. Early summer may see a standoff between buyers and sellers, potentially slowing sales initially. However, as prices adjust, motivated buyers are likely to re-enter the market. Overall, conditions favor buyers.
Demand for luxury cottages should remain solid, especially for properties on The Big Three lakes and Lake of Bays. On the supply side, a rise in available listings, combined with unsold properties returning to the market in the second quarter, could shift the high-end waterfront segment in Muskoka towards a modest buyer’s market
Residential Real Estate
Muskoka Home Sales under $1,000,000 | Non Waterfront
M.L.S.® Only - Does not include Exclusive or Private sales
Muskoka Home Sales over $1,000,000 | Non Waterfront
M.L.S.® Only - Does not include Exclusive or Private sales
Market Trends for Homes
Home sales in Muskoka have slowed significantly, reaching levels not seen since 2014. Higher-priced properties, particularly those over $1,000,000, have fared somewhat better but are still affected. After peaking in June 2021, sales have declined to approximately 700 units per month on a 12-month rolling average.
Luxury homes now represent around 10% of the total market in unit sales and contribute to about 25% of the dollar volume. Unlike the cottage segment, luxury homes have seen more stable sales activity, with less of the volatility affecting waterfront properties.
Average days on market have increased to about 47 across all price points, nearly doubling since 2022, but aligning more closely with historical norms. Sale prices are currently at roughly 95% of the original asking price, down from 105% at the market peak in April 2022, also returning to more traditional levels.
As shown in the chart below, new listings for Muskoka homes surged in 2024, with no signs of slowing down. On a 12-month rolling average, October saw the highest new listing numbers in over 15 years, and the trend continues to accelerate,
New Listings for Homes in Muskoka | All Price Ranges
M.L.S.® Only - Does not include Exclusive or Private sales
What we see coming for homes.....
We expect demand for homes in Muskoka to remain steady but tempered, reflecting trends seen across other Ontario markets. Many potential buyers come from southern Ontario, often relying on the sale of their current home to finance their Muskoka purchase. If the slower pace of sales continues in the south, this may further impact buying activity up north.
As we move into 2025, we anticipate inventory levels will rise, seasonally adjusted, through the second quarter before stabilizing. Similar to the waterfront market, sellers may need to adjust their pricing expectations to align with current market conditions. As this adjustment takes place, we anticipate sales will move closer to historical averages. However, a buyer’s market is likely to persist throughout 2025, offering potential opportunities for prospective home buyers.
The Outlook for 2025 In a Nutshell
Waterfront Property
- Strong Buyer's Market for cottages under $3,000,000
- Modest Buyer's Market for cottages over $3,000,000
- Good inventory in all price ranges
- Prices softening into mid summer
- Sales volumes well under historical averages
Residential Property
- Balanced to modest Buyers Market
- Good inventory in all price ranges
- Prices to remain steady
- Sales volumes under historical averages
Our real estate forecasts are to give you a snapshot of current trends and market insights, but it’s not meant as financial advice. The market can change quickly due to various factors, so we always suggest speaking with a real estate professional or financial advisor before making any big decisions. We’re happy to provide this information as a resource, but please remember it’s just one piece of the puzzle!
If you would like an idea of the market trends on a specific lake or area just contact us. We can break down statistics for any area in the Muskoka, Parry Sound and Haliburton regions to help with an informed decision.
Questions or Comments about Muskoka Real Estate? We would love to hear from you! Call or text John Fincham directly @ 705 783 7718 or find our contact page here.
