Some second-home buyers may now choose to buy domestically – but could that prove a short-lived trend?
With no end in sight to the US-Canada trade dispute that’s rumbled on since the beginning of the second Trump presidency, the number of Canadians crossing the border southwards has plunged – and some reports are even suggesting Canadian snowbirds’ interest in owning US real estate is on the wane.
While 7,100 Canadians purchased US homes last year, a new RAM Development Group survey showed 81% of Canadians are now preferring to keep their investments at home, and real estate professionals have also noted a sharp uptick in Canadians listing their second homes in the US as the tariff chaos continues.
Those trends emerged after President Trump launched a wave of tariffs on Canadian imports just weeks into his new administration and repeatedly suggested Canada should become part of the US.
But while they could also herald a potential boon for Canada’s recreational real estate market as buyers set their sights on domestic second properties over US purchases, a prominent mortgage broker in the cottage market believes the trends are likely short-lived.
Drew Donaldson (pictured top), principal at Donaldson Capital, told Canadian Mortgage Professional some recreational buyers might now gravitate towards the domestic market, but others – particularly younger Canadians – still view the US market as a more attractive option.
For some buyers with family in Canada who want to stay close together, “now is kind of their excuse,” he said. “You’ve got a high US dollar and a low Canadian dollar. You can sell your property, stay closer to home, and have a cottage and second home here in Canada. I do see that happening.
“I think the younger people are still chasing the weather. The weather is just a huge factor and if you’re talking about Florida or Arizona, those are places that I don’t think you’re ever fully going to see [an exodus]. It might be a short-term blip just because of the election and things that were going on – but I don’t see that being an issue long-term. Anyone in their 30s, 40s, maybe in their 50s with families, they’re still going to have to get some sunshine and vitamin D in the wintertime.”
Ipsos polling for Global News after April’s federal election suggested that Canadians aged 55 and over were more likely to view the Trump factor as an influential reason for their vote, while affordability and the rising cost-of-living were much more important for younger Canadians.
Are Canada-US relations finally improving?
Some of the tension that characterized the Canada-US relationship in the opening months of this year appears to have eased, with prime minister Mark Carney and Trump striking a conciliatory tone during a meeting at the White House at the beginning of May.
US tariffs and Canadian countermeasures are still in place, but Donaldson said a trade agreement between the two countries should see a degree of normality resume by 2026. “I think people have short memories. By next year, there shouldn’t be an issue,” he said.
“I think Canada needs to sign a trade deal with the US. Whether they like it or not, they’re heavily dependent on America. Both countries will prosper as we move forward here. If Canada tries to play hardball, I think you’re in for worse economic conditions and the best thing for both countries is for this to get settled and a trade deal to get signed as soon as possible.”
Cottage market in good health despite other headwinds
Whether because of an uptick in interest from Canadians who would otherwise have purchased in the US or for separate reasons, Donaldson described the cottage market in Muskoka – a prime location for recreational buyers in Ontario – as “surprisingly still very healthy” even amid a challenging market elsewhere, notably in the province’s condo space.
Leah Zlatkin of LowestRates .ca says Ontario’s housing market is cooling fast, with more relistings and price drops in cities like Toronto and Milton. https://t.co/luV6Hk87Ri
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 17, 2025
“There are deals trading in the $6 million, $8 million, $10 million range,” he said. “Our condo market is in severe bear territory and not doing very well – and the cottage market, I would say, is pretty balanced.
“I’ve been a little bit surprised by that. I thought it would have taken more of a hit. But let’s be thankful that it seems to be on fine footing and people are still buying cottages.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
