Since peaking in 2022, Ontario’s cottage market has been undergoing a slow but steady market correction that has seen sales fall, prices drop and inventory rise.
This trend continued in 2025 with a 12% year-over-year decrease in annual sales, and seven to nine months of inventory across the core cottage-country markets of Muskoka, Parry Sound, and Haliburton, according to Finding Your Muskoka.
As for prices, they fell 5% to $809,900 for waterfront properties across Ontario’s recreational market, according to Royal LePage.
In the new year, a long, cold winter that culminated in several weeks of severe flooding across much of cottage country further stunted the spring market. The Muskoka waterfront market posted just 22 sales in the first quarter, down 12% from Q1 2025. Meanwhile, months of inventory averaged 17.5, with properties sitting on the market for 95 days on average, according to Finding Your Muskoka.
Still, local realtors say they’re beginning to see things turn around.
“The market has been about three weeks late in getting kicked off. It sort of limped into Victoria weekend,” says Ross Halloran, cottage country realtor, Broker and Senior Vice President of Sales at Halloran & Associates, Sotheby’s International Realty Canada. “But now, as we're getting more consistent temperatures in the 20s and water levels have receded, we're seeing more interest.”
Buyers returning to market this summer will benefit from a slower market that offers them more negotiating power, but Halloran says the situation is complex. “Even though it's technically a buyer's market, there's not a lot of that traditional product that people are looking for,” he says. This includes new-build properties with guest accommodations, southwest exposure, and a level lot — especially those located on prestigious lakes and near a town or beach. “Those are the ones getting above asking prices,” he says.
Brad Bird of Kawartha-based BirdHouse Realty is seeing the same thing. “If they price it right, cottages with a great view and a good quality waterfront will sell quickly,” he says. Where both Bird and Halloran are seeing stagnation is in over-priced properties where the sellers are holding onto Covid-era returns. Halloran says this listing price stickiness, combined with choosy buyers, is inflating days on market.
Maryrose Coleman, Sales Representative & Senior Vice President of Sales at Halloran & Associates, Sotheby’s International Realty Canada, says that on many lakes, properties are selling below listing as buyers exercise their negotiating power. “Buyers are being more judicious. They're not as emotionally invested in the transaction as they were in previous years,” she says. “Right now, list-to-sales price ratios are sitting around 93% to 95% in the big three lakes in Muskoka, and around 93% in the outlying lakes in Haliburton and the Kawarthas.”
As for the type of buyers expected to come to market this summer, Coleman says we may see fewer buyers whose budgets sit in the lower range, as they are more sensitive to economic uncertainty stemming from geopolitical conflict and the potential for interest rate hikes. Halloran says they may also be waiting to time the bottom of the market.
Other buyers taking up an increasing chunk of the market include first-time homebuyers and Americans. According to a report from REMAX, 45% of prospective homebuyers in Canada see recreational properties as a way to get their foot in the market — a national trend Coleman says she absolutely sees playing out in Ontario’s cottage country. “In the last year, I’ve had two clients who were renting in Toronto decide to buy a cottage as their first year-round home,” she says. For many young people, who are getting priced out of markets like Toronto, cottage country can provide a more affordable alternative.
For Bird’s part, he’s seen a notable uptick in the number of American buyers, thanks in part to the strong U.S. dollar allowing their money to go further north of the border. “US demand is strong because of the dollar, but they also know it's a good time to buy,” he says. “If you're sitting on the fence and you always wanted a good waterfront, this is the best time.”
