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"Full-On Frenzy": Muskoka Real Estate Market Remains Highly Competitive – Toronto Storeys

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“Our market isn’t typically like the Toronto market, but it’s just been crazy lately.”

In years past, real estate agent Maryrose Coleman of Sotheby’s Realty adds that the Muskoka market has usually slowed down by now. “Usually what we see is a lot of activity in the springtime… it tends to slow down as we move into July.”

To be clear, there is no slowdown in sight right now.

“I’ve been slammed like I’ve never been slammed before,” says Ross Halloran, Broker at Sotheby’s Realty. “I have a team of nine agents and five support staff and we’re stretched thin just trying to keep up with the demand.”

Muskoka Real Estate
Sagamo Estate, Lake Joesph, Muskoka – for sale for $6,995,000

In March, when the COVID-19 pandemic hit Ontario, this is not what anyone was expecting cottage country real estate to look like. But as people settled into the ‘new normal’ and saw that they could successfully work from home, city condos suddenly started to feel more and more cramped, and space north of the city began to feel more and more like a full-time option.

When COVID hit, it forced the Spring Cottage Life Show, scheduled to take place at the International Centre in Mississauga from March 26-29, to be cancelled as well. “The SCLS is like our Super Bowl,” Halloran says. “When it was cancelled, and with COVID going on, I went to my team and I said, ‘listen, this is going to be a brutal summer.’ At the time we had 53 listings.”

Luckily, he was wrong.

“The pandemic turns out to have only accelerated the trend of retirees, empty-nesters, those looking to down-size, and people now working from home looking to Muskoka as an answer,” says Halloran.

READ: Muskoka Waterfront Property Sales and Prices Hit Record Highs in June

Both Halloran and Coleman agree they are currently seeing unprecedented demand. “I had a client with a $6.5M budget who wanted a cottage on either Lake Rosseau or Lake Joseph, though it couldn’t be an island or water access only, and I was only able to find one property to show them,” Coleman tells Toronto Storeys. All told, she found seven properties available in the buyer’s price range, but just one that wasn’t on an island or water access only.

“I’m seeing properties that have been on the market for 5 years suddenly being sold.”

So if you thought the pandemic was going to give you the opportunity to sweep into cottage country with the intention of picking out the property of your dreams, you’d better take a jump in a cold lake. Certainly, according to both Coleman and Halloran, if you’re looking at a piece of Muskoka real estate on one of the ‘Big 3’, that is, Lake Joseph, Lake Rosseau, and Lake Muskoka, Lake of Bays.

Recent numbers released this week from the Canadian Real Estate Association (CREA) back up Coleman and Halloran’s insights. In fact, waterfront sales in Muskoka in June not only posted an incredible 85% increase over June 2019, the region’s waterfront properties also saw a jump in their median price, hitting a record-high of $660,000.

Further still, it’s possible that the strongest indication of how hot Muskoka real estate is right now is that by this time in previous years, several properties listed in the spring that didn’t sell have usually been taken off the market with the intention of having them return in the fall for the second round of buyers who’ve missed out on another summer of owning and want to scoop up a cottage in time for next year. But Coleman says she’s “not anticipating we’ll see much of that this year, given how much demand there is and how little inventory is.”

Given that Coleman has buyer briefs from over 15 clients – ranging from under $1M to more than $10M – and has “nothing to sell them,” it sounds as though she’s right. Meanwhile, Halloran, on his way to show yet another property, tell us, “What we thought was sure to turn into a buyers’ market just a few months has once again turned out to be another sellers’ market.”

And it may just stay that way for a long time to come.

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Real eState

What Is the Canada Mortgage and Housing Corporation (CMHC)

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The Canada Mortgage and Housing Corporation (CMHC) is a Canadian Crown Corporation that serves as the national housing agency of Canada and provides mortgage loans to prospective buyers, particularly those in need.

Understanding the Canada Mortgage and Housing Corporation (CMHC)

The Canada Mortgage and Housing Corporation (CMHC) serves as the national housing agency of Canada. CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry.

CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”1

A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. CMHC, headquartered in Ottawa, provides many additional services to renters and home buyers, including mortgage insurance and financial assistance programs. CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.

CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada.2 Additionally, CMHC provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.3

Professionals and Consumers

CMHC provides services to both professionals and consumers. For professionals, CMHC aims to work in collaboration with different groups to provide affordable housing. Services include project funding and mortgage financing, providing information to understand Canada’s housing market, innovation and leadership networks to access funding and talent to spur housing innovation and increase supply, and providing speakers and hosting events for the industry.4

For consumers, CMHC seeks to provide all the tools an individual would need to either buy a home or rent a home and a variety of information and assistance for current homeowners, such as managing a mortgage, services for seniors to age in place, and financial hardship assistance.56

For financial hardship and mortgage assistance, CMHC provides tools that include payment deferrals, extending the repayment period, adding missed payments to the mortgage balance, moving from a variable-rate to a fixed-rate mortgage, and other special payment arrangements.7

Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy

In November 2017, the Canadian government announced the National Housing Strategy.8 Rooted in the idea that housing is a human right, this 10-year, $70 billion project will largely be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.9

Strategic initiatives of the National Housing Strategy include:

  • Building new affordable housing and renewing existing affordable housing stock
  • Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
  • Supporting research, capacity-building, excellence, and innovation in housing research10

History of the Canada Mortgage and Housing Corporation (CMHC)

CMHC was established in 1946 as the Central Mortgage and Housing Corporation by the federal government in Canada with the primary mission of administering the National Housing Act and the Home Improvement Loans Guarantee Act and facilitating discounts to mortgage companies. Initially, CMHC began by providing housing to returning Canadian war veterans, and toward the end of the 1940s, CMHC began to administer a program providing low-income housing across Canada.11

In 1947, CMHC was responsible for opening Regent Park, a large low-income housing project, and Toronto’s first urban renewal project. By the 1960s, CMHC introduced co-op housing and multi-unit apartment buildings throughout Canada.11

In 1979, the Central Mortgage and Housing Corporation changed its name to the Canada Mortgage and Housing Corporation

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Real eState

Canadian home price gains accelerate again in May

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Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-National Bank Composite House Price Index, data showed on Thursday.

The index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 2.8% on the month in May, led by strong month-over-month gains in the Ottawa-Gatineau capital region, in Halifax, Nova Scotia, and in Hamilton, Ontario.

“It was a third consecutive month in which all 11 markets of the composite index were up from the month before,” said Daren King, an economist at National Bank of Canada, in a note.

On an annual basis, the Teranet index was up 13.7% from a year earlier, the 10th consecutive acceleration and the strongest 12-month gain since July 2017.

Halifax led the year-over-year gains, up 29.9%, followed by Hamilton at 25.5% and Ottawa-Gatineau at 22.8%.

Housing price gains in smaller cities outside Toronto and its immediate suburbs again outpaced the major urban centers, with Barrie, Ontario leading the pack, up 31.4%.

On a month-over-month basis, prices rose 4.9% in Ottawa-Gatineau, 4.3% in Halifax and 3.7% in Hamilton.

The Teranet index measures price gains based on the change between the two most recent sales of properties that have been sold at least twice.

Canada‘s average home selling price, meanwhile, fell 1.1% in May from April, Canadian Real Estate Association data showed on Tuesday, but jumped 38.4% from May 2020.

 

(Reporting by Julie Gordon in Ottawa; Editing by Christopher Cushing)

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Economy

Bank of Canada seeing signs of cooling in hot housing market

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The Bank of Canada is starting to see signs that the country’s red hot housing market is cooling down, although a return to a normality will take time, Governor Tiff Macklem said on Wednesday.

The sector surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. The national average selling price fell 1.1% in May from April but was still up 38.4% from May 2020.

“You are starting to see some early signs of some slowing in the housing market. We are expecting supply to improve and demand to slow down, so we are expecting the housing market to come into better balance,” Macklem said.

“But we do think it is going to take some time and it is something that we are watching closely,” he told the Canadian Senate’s banking committee.

Macklem reiterated that the central bank saw evidence people were buying houses with a view to selling them for a profit and said recent price jumps were not sustainable.

“Interest rates are unusually low, which means eventually there’s more scope for them to go up,” he said.

Last year, the central bank slashed its key interest rate to a record-low 0.25% and Macklem reiterated it would stay there at least until economic slack had been fully absorbed, which should be some time in the second half of 2022.

“The economic recovery is making good progress … (but) a complete recovery will still take some time. The third wave of the virus has been a setback,” he said.

The bank has seen some choppiness in growth in the second quarter of 2021 following a sharp economic recovery from the COVID-19 pandemic at the start of the year, he added.

(Reporting by David Ljunggren and Julie Gordon; Editing by Peter Cooney and Richard Pullin)

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