The Muskoka Simcoe Cottage Market is Booming: What To Know Before You Buy

Muskoka chairs sitting on lakeside dock

The Muskoka Simcoe Cottage Market is Booming: What To Know Before You Buy

Similar to most real estate markets in Ontario, the Muskoka and Simcoe County housing markets have seen a massive rise in demand. Muskoka’s cottage market home sales were at a record high in March of 2021, as cottagers and new home buyers alike vied for their piece of paradise, purchasing waterfront and non-waterfront properties, depleting the available inventory and forcing high-stakes bidding wars. In the spring of 2020, both non-waterfront and waterfront property sales increased by 16.5% and 44.9%, respectively.

Why Are We Seeing Real Estate Demand Increase?

There are multiple reasons people are opting to purchase real estate in the Muskoka and Simcoe County housing markets as the pandemic continues to create shifts in our day-to-day lives.  

During the various lockdown periods, those Ontario residents who were forced to shelter in urban settings saw a need for the private outdoor space available in Muskoka and Simcoe County. Remote work opportunities meant proximity to workspaces was no longer a mandatory requirement. Couple this urban exodus of remote workers with new retirees looking to relocate to cottage country and we can see why this increase in demand has become so significant to both the Muskoka and Simcoe County cottage markets.

What You Should Know Before Purchasing a Cottage Property in Muskoka and Simcoe County

While home sale transactions can often be a straightforward process, purchasing a vacation property or secondary residence can be a bit more involved, especially when dealing with properties in remote locations. 

It’s important to have a trusted and experienced lawyer with the insight and knowledge to help you navigate through the process. Stewart Esten provides the expertise you need to make an informed decision when purchasing a residence in cottage country.

Here’s what you should consider from a legal standpoint:

Property Access

Before you make your purchase decision, be sure to have a solid understanding of your access to the property. Is the access private? In this case, you will be responsible for maintaining the access year-round.  If the access is shared, you may need to have a discussion with your neighbours as to who is responsible for maintaining the access road.  If the property access is via a municipal road, is it well maintained and accessible year-round? These types of questions will lead you to a more informed decision.

Rural Infrastructure

Along with municipal road maintenance, you’ll also want to explore other municipal services that may be included with your vacation property such as water, heating and sanitation utilities. Often cottage properties will include wells and may source their water from nearby bodies of water. These factors may impact your decision. 

Land Surveys 

When you purchase a property you may request a land survey to be completed to determine where the property lines fall, where the easements (if any ) lie and the exact location of buildings, among other things. This is not required as title insurance will cover you and the lender if the survey would have revealed any defects in the property. Still, title insurance is not a perfect solution and having an up-to-date land survey completed will allow you to better understand what you’re buying and possibly avoid future disputes with neighbouring homeowners.

Home Inspections

Due to the increased demand and limited inventory of cottage properties, potential buyers are tempted to waive clauses in real estate sales contracts to increase the likelihood of winning their bid on the property. Stewart Esten does not generally recommend this unless you are willing to accept the property “as is” and risk having to complete repairs at your own cost. Home inspections give you insight into the state of the property and can prevent any surprises down the road.

Home Winterization

Is the property set up for year-round access? Has it been properly winterized? Perhaps you’re looking for a three-season property. If you’re looking to relocate or visit the property year-round, a home inspection will give you an idea of whether you can live there all year or if there will be steps you’ll need to take to ensure you’re comfortable throughout the seasons.

Insurance and Upkeep Costs

Is the property on a septic system? A septic bed needs to be pumped every three to five years, which can be a significant cost and may affect your insurance quote. If you need to maintain roads this will be another maintenance cost to consider. Are there unhealthy trees on the property? Tree removal services can be expensive and should be factored into your decision.  In terms of insurance, there are a number of factors that will lead to your quote such as flood risk from nearby bodies of water, proximity to local fire stations and how often you’ll be occupying the dwelling.

Cottage Mortgage Calculator

Whether or not the property you’re purchasing is your primary residence may affect the total required down payment on the purchase. Use this handy cottage mortgage calculator from Cottage Life Realty to gain some insight.

Vacation Property Tax Rules in Canada

There are taxes to consider for any residence that is not used as a principal residence. There may be taxable capital gains when you sell a cottage property and HST may apply when you buy or sell depending on use. You should consult your accountant to better understand the tax implications of cottage property ownership.

Stewart Esten Is Here To Help

There are many factors to consider when purchasing a cottage property in Simcoe or Muskoka, and the purchase process can often seem overwhelming. At Stewart Esten, we have over a century of experience in residential real estate transactions and are happy to help you navigate the sales process. 

Contact us today to speak with an experienced real estate lawyer and avoid any unwelcome surprises post-purchase.

The information provided herein is not intended as legal advice and should not be construed as such. For personalized legal guidance, it is recommended to seek the assistance of a qualified lawyer.
Stewart Esten
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