The allure of the second home has long been an aspiration for Torontonians who long for a place to unwind from the hectic lifestyle of the city. It might not seem like Muskoka and Toronto real estate are connected, yet the two markets have close ties that might not be obvious on the surface. Here’s why Muskoka and Toronto real estate are connected.
The Muskoka Real Estate & Cottage Market
Inventory is up and median prices are down for waterfront properties in Muskoka with a drop of 18 percent year over year. Interestingly, non-waterfront properties rose by 28 per cent bringing it up to $36,000 thanks to low supply. Once again, the inventory issue continues to affect pricing, even 2.5 hours away from the heart of Toronto.
Toronto Success = More Second Home buyers
Toronto money very clearly has an influence on property ownership in Muskoka. When Torontonians are successful, they are earning more and therefore spending more on big ticket items.
Not everyone making a better living will opt to buy a cottage in Muskoka, but it still increases demand as more people can afford to do so.
The Toronto job market is strong and is seeing expansion as more companies are drawn to the city. Tech companies are one of the main industries attracted to the city, and inventory in the commercial real estate sector is seeing change. Toronto is leading the way in the office leasing category when it comes to Canadian cities. It experienced the lowest office vacancies with Vancouver not too far behind. Demand is becoming so high in Toronto that even a whisper new office space is available leads to pre-leasing. This means new jobs are on the horizon.
More Work-From-Home Options & Retirees
Let’s not forget the way people work is changing quickly.
The telecommuting trend is growing. If more people can work from anywhere, many will be able to choose where they live.
Workers close to retiring are also semi-retiring slightly earlier than normal and sometimes working from outside of the city for themselves as consultants or in other occupations that allow remote work. Muskoka is capturing this chunk of folks.
The idea of having no commute and working with a view of a stunning North Ontario backdrop is an appealing lifestyle alternative that will attract more and more people.
You can have a fulfilling career, find affordable living and not really make too much of a sacrifice. Trendy areas like Muskoka offer all the urban living amenities including a vibrant nightlife and fine dining options, at least in the summer.
More employers are becoming more open to the idea of telecommunicating. In 2017, 47 per cent of employees reported they worked from outside their employer’s main offices for half the week or more.
Toronto Real Estate Inventory Shortages
The ongoing issue of inventory of listed homes in Toronto real estate will continue in 2020. Although the move to the suburbs has been the solution for this issue, many Torontonians are watching prices rise while inventory drops. The market is pushing people further out, but that will eventually fuel demand issues in the suburbs.
Toronto was listed as the second most overvalued market in the world on the annual global real estate bubble index. The publishers of the report don’t see this correcting itself any time soon. With growing inventory challenges, this is even more likely to be the case. So, while the suburbs are calling to more Torontonians who dream of home ownership, some are looking for different solutions to their home ownership woes.
Cottages Are a Cheaper Option
For a growing number of people ready to throw their money at a property, the idea of owning a cottage is a new consideration. It’s not just Torontonians either. Two-thirds of Canadian millennials would consider buying a recreational property in the next decade.
As Muskoka cottages see higher sales, it could be because Torontonians are tired of being kept out of the real estate market because Toronto prices are so high.
With extremely affordable options in cottage country available, out of the box thinkers have looked for new opportunities and that has led them to Muskoka. Buyers will get far more home for their money in cottage country when compared to the tiny Toronto condo. And you get a waterfront view, with no fears some builder will block it out with a new condo development in a year.
What you spend on a one-bedroom or studio condo apartment in Toronto will get you a three-bedroom cottage you can enjoy on weekends and vacations. This has many Toronto homebuyers finding the option a no brainer.
Cottages Rising in Value
As demand continues to present problems in Toronto and provides a good reason for more people to buy in cottage country, demand will grow, inventory will drop, and prices will begin to rise. As a result, cottage buyers will see a return on investment that can make it even more worthwhile. As well, cottages not in use during the week can bring in some cash if owners are so inclined to decide to rent them to vacationers. It’s kind of a win-win situation; especially considering how new Toronto regulations are challenging investor’s rights to rent out their condos on sites like Air BnB.
Torontonians Cashing Out
It is not just first-time buyers turning their sights northward. Many Toronto homeowners are looking at the market as a way to make some money. It is not uncommon for homeowners to sell their Toronto properties and purchase a lower-priced, extremely enticing Muskoka property. This trend to cash out is going to continue to impact inventory. Even small numbers of people opting for this idea will be adding more listings in Toronto and decreasing inventory in Muskoka markets.
Renters’ Choice
Many Toronto renters aren’t buying because they have been priced out. Another option? Keep renting a home they like conveniently located in Toronto and buy a cottage as their weekend retreat.
There are many reasons to do this including:
It takes way less time to save for a cottage down payment then it does for a Toronto property
A cottage mortgage payment will then be lower than a Toronto mortgage
Mortgages can be supplemented by renting out the cottage when it is not in use by the owner
Investing in Muskoka real estate gives you the best of both worlds. You have a permanent rental home close to work and a recreational property to go to on weekends and vacations.
As you can see, the Muskoka and Toronto real estate market have many factors connecting them. If you would like more information on how you can take advantage of either or even both markets, speak to our experts today.
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
