Should You Buy a Vacation Property in 2025? What to Know About Canada’s Cottage and Cabin Market

Edith Parinas
Jun 25
3 min read

Dreaming of Lakeside Living?

Whether it’s a cozy cabin in the woods, a beachfront hideaway, or a slope-side ski chalet, vacation properties continue to hold major appeal for Canadians—especially after the rise of remote work and the desire to “escape the city.”

But is 2025 the year to buy?

Let’s look at the current trends, financial considerations, and short-term rental regulations to help you decide if this is your season to go from dreamer to vacation homeowner.

Current Market Trends: Vacation Properties in 2025

Here’s the lay of the land:

🏠 Prices are cooling after peaking during the pandemic buying boom, but are still 15–30% higher than pre-2020 levels in many areas.
📉 Interest rates have started to dip, making mortgages more accessible again—but lenders are more cautious with second-home approvals.
📊 Inventory is up, especially in less touristy regions (hello, buying power!).
⛔ Short-term rental regulations have tightened across provinces (especially B.C., Ontario, and Quebec), impacting potential income streams.
🌲 Many buyers are now looking at multi-use properties—places they can enjoy, rent out, and eventually retire to.

4 Things to Consider Before Buying a Vacation Home

1. Can You Afford a Second Mortgage?

Lenders typically require:

5–20% down (depending on usage and insurer)
Strong credit and provable income
Higher stress test qualification, as it's not a primary residence

Pro Tip: A vacation property that will be used as a rental or part-time home needs to be clearly defined in your mortgage application.

2. Do the Numbers Make Sense?

Think beyond just the sticker price. Factor in:

Property taxes (often higher on non-primary homes)
Insurance (especially for waterfront, seasonal, or remote locations)
Maintenance (plowing, roof repairs, septic upkeep)
Travel costs (fuel, ferries, time off)

A property that’s too expensive to maintain may become more stress than serenity.

3. Do You Plan to Rent It Out?

New regulations are cracking down on short-term rentals (Airbnb, Vrbo) in many areas:

BC: Principal residence requirement in communities over 10K residents
Quebec: Certification required or face fines up to $50,000
Ontario: Municipal rules vary wildly – some allow it, some restrict it to 30+ days, others ban it entirely

If your plan depends on rental income, do your homework first. You may want to consider a long-term tenant strategy or co-ownership with family.

4. What’s Your Long-Term Plan?

Buying a vacation property makes more sense when it's part of a larger plan:

Will it eventually become your retirement home?
Can it act as a wealth-building rental in the meantime?
Is this a family legacy property you’ll pass on?

Thinking long-term turns an emotional decision into a smart one.

Hot Spots for Vacation Property Value in 2025

Looking for solid ROI potential? These areas are on watchlists:

🏔️ Interior BC (e.g., Kamloops, Shuswap): Prices have softened; strong tourism draw
🛶 Eastern Ontario (e.g., Rideau Lakes, Kawarthas): Cottage charm with year-round appeal
🏖️ Nova Scotia and PEI: Still affordable compared to Ontario/BC, and growing in popularity
⛷️ Laurentians, QC: Four-season use, international appeal, ski + lake combo

Final Thoughts

A vacation home can be a source of joy and wealth—but only when it fits your life and budget. In 2025, the best deals might not be in trendy hot spots, but in up-and-coming towns, co-owned opportunities, or even a fixer-upper with vision.

With interest rates trending downward and some pandemic-fueled froth coming off prices, now may be a great time to act—if your finances are ready and your lifestyle lines up.