The May long weekend is widely regarded as the unofficial beginning of cottage season for many Canadians, but recent economic tensions are causing potential buyers of vacation homes to hesitate. A report by Re/Max Canada, based on a Leger survey conducted in March 2025, indicates that while lower borrowing costs and improved affordability in the recreational market last year had sparked renewed interest, current economic uncertainties have dampened this enthusiasm.
The ongoing U.S.-Canada trade war is a significant factor contributing to this hesitancy. According to the survey findings, 59 percent of respondents whose housing choices are influenced by recent tariffs expressed decreased confidence in the recreational real estate market compared to the previous year, indicating a significant impact of economic conditions on buyer sentiment. Re/Max Canada President, Don Kottick, noted that the market took a hit as trade discussions commenced, but he remains optimistic about a rapid recovery should a new trade agreement be reached between Canada and the U.S.
Kottick emphasized the enduring interest in the secondary home market, asserting that the underlying desire among Canadians to invest in vacation homes is likely to persist despite current uncertainties. However, he acknowledged that many recreational buyers are currently holding off as they seek clearer signs of economic stability.
Despite a potential slowdown in unit sales, the report forecasts that activity in Canada’s recreational markets is expected to remain relatively stable, with projections indicating a year-over-year range of flat activity up to a 10 percent increase. National average prices in the recreational market are anticipated to rise by approximately 1.8 percent in 2025. Among those less confident in the housing market, about 19 percent cited tariff threats as a reason for postponing their buying or selling decisions until further clarity is obtained. In Ontario, the market is largely characterized as "paused," with both buyers and sellers closely monitoring economic indicators, particularly regarding employment.
Year-over-year price analysis in Ontario's cottage market reveals declines across approximately half of the regions studied, with decreases ranging from about one to 20 percent in areas including Niagara-on-the-Lake, Peterborough County, Northwestern Ontario, Orillia, and Grand Bend. This downturn is attributed to an increase in inventory. Conversely, the other half of Ontario's cottage markets has experienced price increases, driven by tight inventory levels in regions such as Simcoe County, Kawartha Lakes, Greater Sudbury, and Prince Edward County.
The report also highlights British Columbia's recreational market, where an average price increase of 1.1 percent is expected in 2025, attributed to balanced market conditions. Carrie Lysenko, CEO of online real estate brokerage Zoocasa, noted a trend of Canadians exercising caution amid market fluctuations. She pointed out that some sought-after cottage destinations, particularly Ontario's Muskoka region, may be less susceptible to economic shifts due to a distinct buyer demographic. Muskoka, often referred to as the "Hamptons of the north," attracts high-net-worth individuals seeking secondary or investment properties.
Additionally, there is a potential shift in Canadian consumer behavior regarding real estate investments. An analysis by Zoocasa indicated that the tariffs might be causing Canadians to pull back from purchasing U.S. real estate, particularly in warm resort markets. As Canadians comprised the largest share of foreign buyers in the U.S. last year, with an average purchase price around US$834,000, there is speculation that domestic purchases could rise as interest in U.S. properties diminishes. Lysenko highlighted the relative affordability of Canadian vacation properties, suggesting that as interest in U.S. real estate wanes, it could place greater pressure on desirable Canadian destinations such as Muskoka and Whistler.
Moreover, the Re/Max report hints at optimism for a rebound in Canada's cottage country, especially if Canadians shift their travel plans away from the U.S. towards local destinations, reminiscent of the surge in local tourism seen during the pandemic. However, the critical factor remains affordability, with 57 percent of survey respondents identifying it as a crucial determinant in their purchasing decisions. Kottick emphasized that the ability to invest in vacation properties heavily depends on Canadians' disposable income.
