The weather is getting warmer, but the cabin and cottage market remains cool. And a new survey by one of Canada’s big realtors, suggests economic uncertainty is taking the heat out of recreational property purchases.
Confidence Drops as Uncertainty Jumps
Falling interest rates and rising consumer confidence buoyed the cottage market through 2024. But the trade war and punitive tariffs launched by the United States have poured cold water on that optimism, despite an increase in staycation plans. The ReMax Cabin and Cottage Trends Report indicates that nearly half of Canadians (48%) say they are less likely to travel to the U.S. this year.
“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 ReMax Canada President, Don Kottick.
Rental Restrictions are a Factor
Regulatory factors may also be contributing to a softer recreational market. Nearly 20% of owners who plan to sell in the next year or two cite restrictions on short-term rentals as their key reason. They say the rules, that are designed to combat Canada’s housing shortage, have diminished the investment potential of their property. The survey indicates about 12.5% of owners are investors. However, the survey also suggests that 34% of Canadians see recreational real estate is a good investment.
Realtors Remain Optimistic
The ReMax realtors themselves remain relatively optimistic about the recreational market. They are forecasting a, modest, 1.8% increase in the average price for 2025 and they expect sales activity could rise by as much as 10% in some markets.
Affordability and Changing Attitudes
For buyers, affordability is even more important, with 57% saying it is their top consideration. That is up from 46% in 2024, and 43% in 2023.
Those affordability concerns have led a change in attitudes about uses for recreational properties. The survey suggests 30% of Canadians who are planning to purchase a cabin or cottage in the next one to two years see it as a viable primary residence, while 29% say, housing shortages make a cottage a viable primary residence to consider. This is particularly true in regions where longer commute times and remote/hybrid work are common.