The mania emanating from Toronto’s real estate market appears to be reaching the shores of cottage country – even before the frozen Muskoka lakes begin to thaw.
“We still have snow and ice up here,” says Paul Crammond of Chestnut Park Real Estate Ltd. in Port Carling.
During the Ontario schools’ March break, the number of visitors picked up noticeably, Mr. Crammond says. It’s still early for listings to arrive, but some sellers are beginning to prepare their properties for sale, he adds, while other cottage owners are tentatively making enquiries about selling this summer.
Along the coveted shorelines of Lake Joseph, Lake Rosseau, Lake Muskoka and Lake of Bays, bidding wars became common last summer for the first time in years, Mr. Crammond says.
One deal that drew attention early this month was the sale of a large cottage which had been on the market for about 18 months. The previous listing price was in the range of $5.4-million. When the property arrived on the market again in 2017, the asking price was cut to $4.550-million and the cottage quickly sold.
In the towns where many residents in the area work, people trade houses all year round. But this year, listings have withered in smaller Ontario cities such as Bracebridge and Huntsville.
“We must be affected by the insanity going on in the city,” Mr. Crammond says. “Things are rippling out from the epicentre of Toronto.”
Meanwhile, the number of listings shrank through the fall. By December, listings were down 35 per cent from the same month in 2015. Decisions to buy and sell cottages tend to be driven much more by emotion and weather compared with real estate deals in the city, says Mr. Crammond.
“One factor up here was people were holding on because the weather was so good,” he says. “That was the incentive to keep the cottage for another year.”
In Toronto, many homeowners are reluctant to list their houses for sale because the cost of moving is so high and there is so much competition for the move-up properties that do come on the market. That creates a vicious circle which keeps supply tight and prices high.
Some people are cashing in and moving to cheaper real estate farther out of the Greater Toronto Area, Mr. Crammond says. “In Toronto, there’s no point in selling your place unless you plan to leave.”
It’s that sentiment that is making things harder for buyers in cottage country’s more urban centres, he believes.
He figures that many of the buyers are Toronto residents who have decided to sell in the city and retire to a smaller town.
In Bracebridge, for example, Mr. Crammond says the real estate market has become increasingly healthy in the past year after a 10-year slump. Huntsville is also in the midst of a strong rebound in buyer demand. “There’s a real shortage of property in those towns right now.”
Meanwhile, for potential buyers in the market for a newly-built home, the Ontario government took steps this week to boost consumer confidence in the development industry throughout the province.
Proposed changes to the Ontario New Home Warranties Plan Act and Tarion Warranty Corp. were unveiled by Minister of Government and Consumer Services Tracy MacCharles, who aims to introduce a bill to the legislature in the fall.
“Our plan involves moving responsibility for setting warranty terms from Tarion to the government,” she says. “We believe that consumers can be better protected by giving government the lead in making rules and setting standards.”
Another proposed change is the creation of a stand-alone regulator for builders. Tarion, which was created about 40 years ago, will continue to oversee warranty protection for new homes.
Ms. MacCharles also wants Tarion to bring in new deposit protection measures that better reflect today’s real estate prices and the deposits that buyers need to put down to secure a property. Consultations will take place, she says, but she aims to have deposits on upgrades and amenities covered by Tarion in the future.Report Typo/Error