Executive Summary
“City House Country Home”, a real estate team of Chestnut Park Real Estate Limited, has been a trusted source for sales data on recreational property (including vacant waterfront land) on Lake Simcoe since 2010. Traditionally, our reports are issued quarterly. However, due to limited sales activity in the first quarter of 2024, we postponed our reporting until June 30th.
Market Review
In the first quarter of 2024, only 13 sales were reported by The Toronto Regional Real Estate Board for the Lake Simcoe area: 4 in Georgina, 1 each in Ramara, Oro-Medonte, and Orillia, and 6 in Innisfil (3 of which were in the Friday Harbour Development). This is comparable to the 14 sales in the first quarter of 2023, but significantly lower than previous years, with a 76% decrease compared to 2021 and a 58% decrease compared to 2022.
The trend continued in the second quarter, with no signs of recovery. Total sales in the first half of 2024 declined by 24% compared to 2023 and by a significant 71.2% since the peak in 2021.
Possible Reasons for the Decline
Several economic and political factors may have contributed to the sluggish sales of recreational waterfront property on Lake Simcoe:
- Rising Interest Rates: Canadian economists suggest that rising interest rates have significantly impacted affordability, making it more difficult for potential buyers to secure favorable financing.
- Increased Cost of Living: Higher living costs have stretched household budgets, leading many to reconsider discretionary purchases like vacation properties.
- Political and Economic Uncertainty: Potential buyers have adopted a cautious approach due to concerns about future economic conditions.
These factors have created a challenging environment for the recreational real estate market around Lake Simcoe.
The Luxury Market
Despite their financial capability, high-net-worth individuals (HNWIs) have shown reluctance to purchase luxury properties on Lake Simcoe. While HNWIs are less affected by interest rate hikes, with many purchasing real estate without financing, sales have remained slow. According to various reports, including the Henley & Partners USA Wealth Report 2024 and the Capgemini World Wealth Report 2024, a significant portion of HNWIs prefer to use liquid assets for real estate transactions. Approximately 46.8% of luxury real estate purchases in North America are made entirely with cash, and around 18% of buyers sell stocks to finance their purchases, avoiding debt in a fluctuating interest rate environment.
However, luxury real estate sales on Lake Simcoe are far from robust. There are currently 65 luxury waterfront homes listed for sale, representing 50% of the 129 active listings on The Toronto Regional Real Estate Board. Of these, 25 properties are priced between $3 million and $10 million, and 7 are listed above $10 million. My conversations with other agents servicing the waterfront market have indicated that despite some showing activity with “qualified buyers,” luxury buyers appear to be reluctant to purchase at this time.
Sales & Price Trends
Luxury sales have declined sharply, with only 24% of total sales in the first half of 2024 being at or above $2 million, compared to 58% in 2023. There was one sale over $3 million and 8 sales in the $2 million to $3 million range. Prices have dropped across all lakefront communities, with an average price decline of 11.3% year-over-year. Specifically:
- Georgina: -5.66%
- Beaverton: Data insufficient for a credible trend
- Orillia: Data insufficient for a credible trend
- Oro-Medonte: -19.3%
- Innisfil: -30%
- Ramara: -3%
Despite this, properties held since 2019 have appreciated by 30%, demonstrating long-term value growth.
Active Listings and Future Outlook
The total number of active listings sits at an all-time high of 129, with list prices ranging from $425,000 to $37million. Properties listed over $2 million make up 50% of the market.
Looking ahead, Canadian economists are cautiously optimistic about a modest recovery in the fall of 2024. The Canadian Real Estate Association (CREA) predicts a 6.1% increase in home sales for the year, with a 2.5% rise in the national average home price.
Mid-Year Total Sales Trend (2020-2024)
| Area | 2020 | 2021 | 2022 | 2023 | 2024 |
| Georgina | 22 | 29 | 15 | 9 | 9 |
| Beaverton | 2 | 9 | 4 | 5 | 2 |
| Orillia | 5 | 15 | 5 | 6 | 1 |
| Oro-Medonte | 14 | 18 | 6 | 12 | 6 |
| Innisfil | 16 | 33 | 8 | 13 | 12 |
| Ramara | 22 | 28 | 23 | 5 | 8 |
| TOTAL | 81 | 132 | 61 | 50 | 38 |
Mid-Year Average Sale Price – Year-Over-Year Change (2023-2024)
| Area | 2023 Avg. Sold Price | 2024 Avg. Sold Price | % Change |
| Georgina | $2,063,100 | $1,946,321 | -5.66% |
| Beaverton | $1,053,842 | $1,025,000 | See note |
| Orillia | $1,556,540 | $1,710,000 | See note |
| Oro-Medonte | $2,022,209 | $1,632,167 | -19.30% |
| Innisfil | $2,543,735 | $1,771,667 | -30% |
| Ramara | $1,291,200 | $1,252,863 | -3% |
| AVERAGE | $1,755,104 | $1,556,336 | -11.30% |
Mid-Year Average Sale Price (2020-2024)
| Area | 2020 Avg. Sold Price | 2024 Avg. Sold Price | % Change |
| Georgina | $1,424,205 | $1,946,321 | 36.70% |
| Beaverton | $1,000,000 | $1,025,000 | See note |
| Orillia | $820,416 | $1,710,000 | See note |
| Oro-Medonte | $1,966,125 | $1,632,167 | -17.00% |
| Innisfil | $1,024,808 | $1,771,667 | 7% |
| Ramara | $875,000 | $1,252,863 | 43% |
| AVERAGE | $1,185,092 | $1,556,336 | 31.30% |
Active Listings as of June 30, 2024
| Area | Total # of Active Listings | Price Range |
| Georgina | 25 | $749,000 – $14,918,000 |
| Beaverton | 12 | $949,000 – $8,499,000 |
| Orillia | 12 | $425,000 – $5,999,000 |
| Oro-Medonte | 26 | $995,000 – $37,000,000 |
| Innisfil | 37 | $1,175,000 – $10,950,000 |
| Ramara | 17 | $995,000 – $7,250,000 |
| TOTAL | 129 | $425,000 – $37,000,000 |
Potential Financial Benefits of Investing in Secondary Homes in Canada
(Please consult a financial advisor for advice tailored to your situation.)
- Long-Term Appreciation: Potential for capital gains when sold.
- Rental Income: Steady income stream from renting out a secondary home.
- Tax Advantages: Possible deductions of mortgage interest and property management expenses.
- Leverage: Ability to finance with a smaller down payment than the typical 20% of purchase price.
- Hedge Against Inflation: Real estate often rises with inflation.
- Tangible Asset: Provides diversification and personal use.
Conclusion: The Lake Simcoe real estate market faces challenges, with declining sales and prices, particularly in the luxury segment. However, long-term value remains strong for properties held since 2020. A modest recovery is anticipated in the fall of 2024, providing potential opportunities for investors and buyers.
For further details or to obtain a full copy of this report, please contact Roxanne at Roxanne@Chestnutpark.com.
Note: This report excludes canal and riverfront properties; only direct and indirect lakefront properties on Lake Simcoe/Lake Couchiching are included.
All data used in this report was obtained from The Toronto Real Estate Board.
This publication is not to be copied or duplicated without the express written permission of Roxanne Finn.
This publication is not intended to solicit buyers or sellers currently under contract with a brokerage.
