Table of Contents
Understanding the Canadian vacation home market
The Canadian vacation home market is experiencing a unique blend of challenges and opportunities. According to a recent report by Royal LePage, while fewer Canadians are actively seeking to purchase vacation homes compared to previous years, the demand still significantly outstrips supply.
This imbalance is expected to drive prices up in 2025, with the median price of a single-family home in recreational regions projected to reach $652,808, marking a four percent increase year-over-year.
Regional price variations and trends
Price increases are not uniform across the country. Atlantic Canada is expected to see the most significant appreciation, with an eight percent rise leading to a median price of $498,852. Quebec follows closely with a 7.5 percent increase, bringing the median price to $457,198.
Alberta remains the most expensive province for recreational properties, with prices nearing $1.3 million, while British Columbia is not far behind at approximately $951,762. Ontario’s market is also on the rise, with a projected median price of $647,107, reflecting a one percent increase from 2024.
Factors influencing demand and supply
Despite economic uncertainties, the desire for vacation homes persists among families. Phil Soper, president and CEO of Royal LePage, emphasizes that this “deep-rooted desire” is unlikely to wane. The pandemic has shifted the dynamics of the market, moving away from the chaotic bidding wars of the past few years.
A survey of over 150 real estate representatives revealed that 46 percent reported stable demand compared to last year, while nearly a quarter noted an increase. Interestingly, falling interest rates have played a crucial role in maintaining this demand, as many buyers still rely on financing options like mortgages.
Looking ahead: What to expect in 2025
As we look towards 2025, the forecast indicates a modest rise in vacation property prices, primarily driven by ongoing supply shortages. The construction of new cottages and cabins has not kept pace with buyer demand, which is expected to support long-term price growth. In 2024, the overall weighted median price of vacation homes rose by 2.3 percent, highlighting the resilience of this market segment. With the average days properties spend on the market increasing, it’s clear that while demand remains strong, the supply chain is struggling to catch up.
