As the owner of a property management company, Brianne Hamilton has worked with cottage owners across Ontario and in Nova Scotia to get their short-term rental licence, a process that has been easier for some than others.
For homeowners in Bracebridge, getting a short-term rental licence in the area known as the heart of Muskoka has had its challenges. Hamilton said she went back and forth with the municipality for months to finalize a drawing of the rental unit she’s managing in Bracebridge that captured the required specifics, and said the annual licensing fee of $1,500 is “one of the most expensive” she has come across in her work getting cottage owners licensed.
While she wishes Bracebridge offered operators more incentive to get licensed — for example, by advertising licensed rentals on its tourism website — she acknowledges short-term rentals in the area can be quite profitable. Short-term rentals are properties that provide sleeping accommodations for periods of less than 28 days, excluding hotels and motels.
“Fifteen hundred bucks when you’re making $100,000 a year on rental income is not that much,” Hamilton said, adding some people do, however, feel the fee is a “money grab.”
Dozens of municipalities and townships in Ontario’s cottage country have implemented short-term rental rules in recent years aimed at addressing complaints about noise, safety and housing affordability. Among those that recently implemented new rules are Kawartha Lakes, Bracebridge and parts of South Bay.
The rules include mandatory inspections and annual fees, limits to the number of guests permitted at a property, limits on which properties can be rented out, and demerit point systems that can see a licence suspended for bylaw infractions by owners or guests.
Since the policies took effect in 2024, the markets have seen a decrease in the number of short-term rental listings, according to data requested by and shared exclusively with the Star by data analysis firm AirDNA.
“(Regulations) caused a little bit of a pullback,” said Bram Gallagher, director of economics and forecasting at AirDNA.
However, the impact on renters and rental operators hasn’t been totally uniform. Here’s how listings and prices have changed.
Muskoka listings dip as prices rise
Bracebridge introduced new short-term rental rules on Jan. 1, 2024, which include a yearly $1,500 fee and a demerit point system to enforce regulations.
A year later, in January 2025, short-term rental listings in Muskoka decreased by one per cent. This May, there were nine per cent fewer listings than last May, AirDNA data shows.
Prices, meanwhile, increased slightly on average year-over-year. In January, they climbed about three per cent compared with one year prior, and in May, they increased 1.5 per cent compared with the year before.
Muskoka remains among the largest short-term rental markets in Ontario cottage country, with about 2,900 listings on average in any given month over the past 12 months. Compared with other cottage areas, it also has one of the highest proportions of professionally managed listings, the data shows.
This summer, prices are expected to average $675 per night — a 6.7 per cent increase compared with last summer’s average price of $633.
Gallagher highlighted that Muskoka has seen increased demand for larger rentals, in particular.
Muskoka is a luxury market, and in times of economic uncertainty, wealthier groups tend to have “higher income durability,” he said, meaning they can likely continue to vacation as usual.
It’s also possible that as larger, more expensive rentals grew more popular, smaller and more affordable rentals shut down, he said, increasing the average nightly price.
South Bay listings decrease as prices remain steady
Since Owen Sound implemented short-term rental rules in March 2024 and Collingwood in January 2025, the number of listings in the South Bay area have also decreased. Among the rules in both areas are that rentals must be on the property where the operator lives, and in Owen Sound, they can only operate for 180 days of the year.
A year after the Owen Sound rules took effect, listings in the South Bay area decreased by 10 per cent. More recently, as of May, listings were down 7.9 per cent year-over-year.
At the same time, prices increased. A year after Owen Sound’s rules took effect, prices rose two per cent to $351 per night. In May, with both Owen Sound and Collingwood’s rules in effect, prices in the South Bay area rose 8.5 per cent year-over-year to $370 a night, AirDNA data shows.
This summer, prices are 1.6 per cent higher than they were last summer, with nightly rates averaging $429.
Kawartha Lakes listings and prices drop
The City of Kawartha Lakes began enforcing short-term rental rules on Jan. 1, 2024, requiring operators to be licensed and implementing a demerit point system.
While the short-term rental market had been growing in previous years, the number of listings has been levelling off.
This January — exactly one year since the rules took effect — short-term rental listings in Kawartha Lakes declined by 23 per cent compared with the year prior. In May, the drop in supply was less dramatic; there were eight per cent fewer listings than a year before, the data shows.
Despite having fewer offerings for tourists this year, the average nightly rate in Kawartha Lakes is more affordable.
In January, an average night cost $378 — a 3.6 per cent drop compared with the year before. In May, nights cost $385 on average — a 12 per cent drop compared with last May.
Reservations this summer are also more affordable. From June to August, booking data shows stays average $465 per night — a 3.5 per cent decrease compared with last summer’s $481 average.
Unlike in Muskoka, larger listings in the region overall have seen less demand while medium-sized units have garnered more interest, Gallagher said.
“Two-bedroom and three-bedroom — these kind of middle-sized listings — they are powering forward,” he said.
