Waterfront homes have been consistently good investments in the Canadian real estate landscape—but will this remain true in 2025? How is Ontario’s cottage market shaping up for the coming year?
The Waterfront Market
Prices in cottage country have been stabilizing since late 2024, with some agents expecting prices to rise again in 2025. As always, price fluctuation will depend on the supply that becomes available in 2025.
Much of what happens in the cottage market is reflected by what’s happening in Toronto’s market, as most of the cottage country buyers come from Toronto and the GTA. 2024 saw overall lower sales numbers in Toronto than in 2023, especially in the oversaturated condominium market. High interest rates caused affordability concerns for many, though rate cuts in the later part of 2024 eased some of the pressure. These trends could reflect cautious buyers going into 2025.
Supply and Demand
The demand for waterfront homes has always been high in Canada, as our many pristine lakes offer views and activities that make having a private cottage retreat a dream for many. Canadians tend to hold on to their cottage properties fiercely, even with rising affordability concerns.For that reason, demand often outpaces supply in the waterfront market, especially for those looking to buy on a specific lake. Because there are a finite number of waterfront properties and many people looking to buy, competition can be intense.
Though it’s difficult to anticipate how much supply will be available come the busier spring months, experts are saying they wouldn’t be surprised if more inventory was available due to those selling the cottages they purchased during the COVID-19 pandemic.
Lingering Effects of COVID
During the COVID-19 pandemic, Canadians fled en masse to cottage country, with many taking up permanent residence in their newfound homes as many jobs became more remote. However, agents in popular cottage areas—such as in the Muskoka Lakes, Parry Sound, and Haliburton—saw a rise in homes for sale in late 2024. Those who bought cottages during the height of the pandemic likely overpaid, and combined with rising monthly payments they can no longer afford to keep the property. This trend could continue into 2025 and increase the supply of waterfront homes.
Who’s Buying?
RE/MAX’s recent Canadian Housing Market Outlook states that first-time homebuyers are likely to be the driving force in Canadian real estate in 2025—but cottage country markets are a bit different.
Though there can be a mixed bag of buyers looking for waterfront properties, typically buyers are looking at cottages as a second recreational property. This usually puts them off the radar of young, first-time homebuyers.
Many agents are seeing activity from GenXers, who view cottage properties as both a good lifestyle and investment decision. Those nearing retirement are also often looking for waterfront properties, especially those who have maintained good rates on their primary residence.
For those finally ready to bite the bullet on a cottage property, the investment potential remains high. Cottage properties have continuously shown to maintain their value while offering owners a peaceful retreat from the city’s hustle and bustle.
