Economic Snapshot - Summer 2019


2018 Township Building Activity Overview

Construction of homes, cottages, and commercial buildings is important to everyone who has an interest in the economy of our Township. Construction projects create meaningful local jobs and the local purchase of building materials. Sales of everything from kitchen cabinets and bathroom fixtures to furniture and consumables are derived from this same construction activity. In short, development done properly is a welcome activity that should be supported by our local government. One of the ways we can tell how things are going in this sector is to review the number, type, and value of building permits issued in the Township of Muskoka Lakes. In 2018, the total value of permits issued dropped to about $115 million from about $121 million in 2017. As usual, the permit value of new Cottages (houses on the water) had the highest total value. The value of permits for Docks was almost the same as the total for Single Family Houses (off the water). More concerning is the continued drop off in Commercial activity which fell dramatically in 2018 after a large drop off in 2017. Here is a closer look at permit activity.

First let’s look at the dollar value of those permits ranked largest to smallest.

  2016 2017 % 2018 %
Cottages $42,037,250 $43,632,519 4% $38,237,338 -12%
Boathouses 14,162,800 11,930,750 -16% 18,047,500 51%
Single Family Houses 7,940,640 19,504,649 146% 14,783,016 -24%
Docks 10,423,060 14,048,251 35% 14,456,234 3%
Accessory Buildings 9,063,900 8,365,506 -8% 8,791,462 5%
Cottage Renovations 7,820,925 6,312,430 -19% 8,430,246 34%
Sewage / Septic 4,935,520 4,799,300 -3% 5,273,787 10%
Commercial 22,334,087 12,606,549 -44% 4,497,345 -64%
Single Family Renos 2,076,200 2,470,000 19% 1,715,047 -31%
Commercial Renos 335,303 2,103,900 527% 1,087,641 -48%
Total $121,129,685 $127,073,854 5% $115,319,616 -9%
 

Other than the permit value of Boathouses and Cottage renovations, bright spots are hard to find in this chart.  A 9% decrease in the overall value of permits is not a healthy picture. 

The following chart shows the number of permits issued by category.

  2016 2017 % 2018 %
Cottages 71 65 -8% 64 --2%
Boathouses 70  70 0% 78 11%
Single Family Houses 24  39 63% 33 -15%
Docks 193  234 21% 224 -4%
Accessory Buildings 99  109 10% 102 -6%
Cottage Renovations 70 92 31% 119 29%
Sewage / Septic 234 207 -12% 221 7%
Commercial 34 28 -18% 17 --39%
Single Family Renos 22 28 27% 25 -11%
Commercial Renos 8 19 138% 21 11%
Total 825 891 8% 904 1%

By dividing the dollar value of the permits by the number issued, we can see the average declared value of the projects.

  2016 2017 % 2018 %
Cottages $592,074 $671,270 13% $597,458 -11%
Boathouses 202,326 170,439 -16% 231,378 36%
Single Family Houses 330,860 500,119 51% 447,970 -10%
Docks 54,005 60,035 11% 64,534 7%
Accessory Buildings 91,555 76,748 -16% 86,191 12%
Cottage Renovations 111,728 68,613 -39% 70,842 3%
Sewage / Septic 21,092 23,185 10% 23,863 3%
Commercial 656,885 450,234 -31% 264,550 -41%
Single Family Renos 94,373 134,643 43% 68,602 -49%
Commercial Renos 41,913 110,732 164% 51,792 -53%
Total $146,824 $142,619 -3% $127,566 -11%

Interestingly, the average cost for a new cottage or house went down in 2018 while the average cost of a boathouse or dock went up.  Otherwise the numbers are not that remarkable.  Perhaps more concerning is the number of commercial projects, their total value, and their average cost.  All of these economic measures fell significantly for the 2nd year in a row.

The exact reason for this downturn is difficult to know.  It could be happenstance or it could be that the high level of concern over the building of new “resort properties” in Muskoka and the interim control bylaw that was put into place (May 2018), had a chilling effect on developers.  No matter what the cause, this reflects a real downturn in our local economy.  Construction activities create jobs and material sales that ripple throughout our communities.  It is important that our elected local leadership pursue policies that help create economic opportunities.

 

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