Tariffs taking toll on cottage market

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Still, prices are expected to rise: report

Economic uncertainty brought on by U.S. tariffs is taking a toll on the recreational property market, a new report finds.

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“Markets don’t like uncertainty and we’re seeing that sentiment manifest in a quieter-than-normal spring market across recreational and traditional residential properties alike,” says Re/Max Canada president Don Kottick.

“We are optimistic that recreational activity could pick up later this season but there’s a big ‘but’ looming. Buyers and sellers will need further clarity around Canada’s approach to tariffs now that the election is behind us before we see a return to more normal levels of activity.”

The buyers’ pause is unexpected. Thanks to lower interest rates, rising consumer confidence levels and easing inflation, recreational activity was poised for an “upswing,” Re/Max Canada’s 2025 Cottage and Cabin Trends Report found.

“Unit sales are not going to go backwards. They’re either going to be flat, or we could see as much as a 10 per cent uptick…depending on which market you’re in,” Kottick says.

Meanwhile, Re/Max brokers and agents expect recreational property prices to rise nationally by 1.8 per cent this year.

Stock market volatility has renewed interest in Canadian real estate: 34 per cent of Canadians who are thinking about buying a cabin or cottage see recreational properties as a good investment.

“Some buyers see this as a window of opportunity to invest in real estate, while prices are still down from their peak levels and relatively stable compared to other investment options,” Kottick says.

DEMOGRAPHIC SHIFT

There’s been a demographic shift in the recreational market, with families overtaking retirees as the primary drivers, Kottick notes. Retirees are followed by couples, investment buyers and estate/family wealth transfers.

That’s in contrast to 2018, when retirees were the dominant force in most markets. Re/Max attributes the shift to lower interest rates, lower property prices and lifestyle changes sparking buying activity among the younger population.

Still, cottage ownership isn’t for everyone. Seventeen per cent of cottage owners planning to sell in the next one to two years said the next generation in their family isn’t interested in taking over the property, influencing their decision to sell.

Another 17 per cent plan to list the family cottage for estate reasons. A “significant wealth transfer” could trigger more cottage inventory in the coming years, boosting affordability thresholds for many cottage and cabin hunters, Re/Max suggests.

Meanwhile, 30 per cent of Canadians who are planning on purchasing a cabin or cottage in the next one to two years see it as a viable primary residence, while 29 per cent say that housing shortages make a cottage a viable primary residence to consider.

“This would be dependent on whether they could work remotely but we are seeing a trend of more people seeing cottages as their permanent residences,” Kottick says.

In another trend likely tied to economic uncertainty, some Canadians are choosing to sell their recreational properties south of the border “and may be looking for recreational properties up in Canada,” he says. “Canadians are staying at home more than they have in the past as opposed to travelling to the U.S.”

Reasons for buying aside, affordability remains top of mind among Canadian cottage buyers. According to a Leger survey commissioned by Re/Max, 57 per cent identified “affordable purchase price” as a must-have, while reasonable maintenance costs ranked at 35 per cent.

ADVICE TO BUYERS, SELLERS

Thinking about buying and/or selling? “The primary message is that things are still selling. If you do need to sell, speak to a realtor and make sure you price your property properly. In any market, if you overprice, your property is going to stagnate but if you price it to sell, it will sell it because there is a lot of pent-up buyer demand,” Kottick says.

“If you’re looking to buy, there are certain areas where the inventories are growing, which creates opportunity.” Buyers need to be aware of short-term rental restrictions put in place in some regions to address the housing inventory shortage, he adds.

“At the end of the day, this is probably going to be a momentary slowdown because the buyers are there and we’ve got the population to drive the activity. I anticipate at some point the market is going to start getting active again.”

Ontario market has pent-up demand

According to a new Re/Max report, year-over-year home prices have dipped between one and 20.3 per cent across half of recreational markets, including Niagara-on-the-Lake, Peterborough County, Northwestern Ontario, Orillia and Grand Bend, largely because of increases in available inventory. Northwestern Ontario is the outlier, as it’s still experiencing low inventory.

Prices are expected to increase in 60 per cent of regions as pent-up demand puts additional pressure on existing inventory. Prices are expected to drop in 40 per cent of regions as inventory remains steady and more listings go onto the market in the warmer months.

Families and retirees from the Greater Toronto Area as well as locals are driving demand across all recreational markets, the report notes. Northwestern Ontario is experiencing growing interest from out-of-province buyers who left the province and are now returning to communities familiar to them.