Recreational Properties To See Modest Price Growth In 2025 Despite Dwindling Supply

Canadians dreaming of owning a cottage or vacation home may face higher prices in 2025. According to Royal LePage's 2025 Spring Recreational Property Report, the average price of recreational properties is anticipated to increase by 4% nationwide, reaching approximately $652,808 by the end of the year. This follows a 2.3% rise in 2024, bringing the average price to $627,700.

The most significant growth is expected in Atlantic Canada, where prices are forecasted to jump by 8% in 2025, following a 12.6% increase in 2024. Cape Breton, Nova Scotia, stands out with a remarkable 26.3% price surge in 2024.

Despite geopolitical uncertainties and economic factors that might dampen demand, the desire for recreational properties remains strong. Phil Soper, President and CEO of Royal LePage, notes that many families have a deep-rooted aspiration to own a recreational home, which continues to drive demand even during market fluctuations.

However, supply constraints are a significant concern. The construction of new cottages and cabins isn't keeping pace with buyer interest, leading to a persistent shortage. This imbalance between supply and demand is expected to sustain long-term price growth in the recreational property market.

Lower interest rates could provide some relief to prospective buyers. The Bank of Canada has reduced its overnight lending rate seven times since June 2024, potentially making borrowing more affordable. However, new regulations on short-term rentals may influence buyer decisions, as some investors reconsider the profitability of such ventures.

In summary, while recreational property prices in Canada are expected to rise modestly in 2025, limited supply and other market factors will continue to influence the landscape. Prospective buyers should stay informed and consider these dynamics when planning their purchases.