Ontario’s cottage country real estate market may be stagnating

A float plane sits docked outside of a cottage on Lake Joseph in Muskoka, Ontario, Canada, on Saturday, May 23, 2015. Bloomberg/James MacDonald

Cottage country homes may be sitting on the market for longer than what is typical for this time of year, according to a report.

Royal LePage published analysis in March, forecasting what might happen with Canada’s recreational real estate market this year amid economic uncertainty.

The real estate company says the “pandemic-era scramble” for vacation properties has eased up as well as the “chaos” brought on by bidding wars amid slim pickings on the market.

Another brokerage, RE/MAX, also says Ontario’s cottage market is facing some “instability” amid growing economic concerns from both buyers and sellers, with some areas seeing prices declining by up to 20.3 per cent since 2024. The real estate company says this is mainly seen in areas like Peterborough County, Orillia, Grand Bend, and Niagara-on-the-Lake.

It also says 40 per cent of cottage country regions may see further price declines as inventory in their area remains steady with more listings hitting the market in the warmer months—though the remaining 60 per cent are expecting prices to rise with pent-up demand adding pressure on what’s currently on the market.

“After three years of double-digit price growth during and after the pandemic, recreational property values have settled slightly below peak for the 2025 season,” Royal LePage president and CEO, Phil Soper, said in a release. “From 2021 to 2023, demand for cottages surged as Canadians traded cityscapes for lakefront living amid lockdowns, travel restrictions and the shift to remote work—driving prices to record highs. Now, more than five years on, the market is seeing a return to typical year-over-year price growth.”

For Ontario last year, Royal LePage says the weighted median price for a single-family home dropped by 1.5 per cent since 2023, to $640,700, while condos decreased by 5.7 per cent to $468,900. Though the median price of single-family homes is forecast to rise by one per cent in 2025, Royal LePage notes.

Remax also forecasts prices for recreational homes to rise by 1.8 per cent across Canada this year, with the number of sales expected to either remain flat or increase in most markets.

Compared to 2024, Royal LePage says 39 per cent of their real estate experts in Ontario note that there is less inventory this year, and 61 per cent also commented that the average amount of days a property stays on the market has risen.

Muskoka broker John O’Rourke says while the region has seen a gradual rise in inventory—some good news for buyers—he adds that neither increased supply nor lower interest rates have boosted demand quite yet.

Additionally, the restrictions some regions implement around short-term rentals can dissuade prospective homebuyers from investing in vacation homes in the area, O’Rourke notes.

Nineteen per cent of Canadians surveyed in Remax’s Leger survey selling or planning to sell their vacation homes in the next year say they don’t see the investment potential anymore of a recreational property.

Have you bought a cottage, cabin or other recreational home that you’re having trouble selling? Are you facing significant losses after buying the property at the peak of the recreational housing market during the COVID-19 pandemic? Or are you struggling to keep up with payments while at the same time finding it difficult to help pay for the property by renting it out as a short term vacation home? CTV News Toronto wants to hear from you.

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