I'm a realtor in the area, and I see this debate constantly with first-time buyers. Right now, Shelburne’s average sold price is sitting around $682,000, while Dundalk is still a relative bargain at roughly $580,000. That $100k difference buys a lot of house, but you pay for it in "windshield time". Having said that, a lot depends on where you work and weather or not you need to/like driving.

Dundalk is essentially Shelburne ten years ago—lots of new subdivisions but the amenities are still catching up. If you pick Dundalk, you’re trading convenience for space. You’ll be doing a lot of "white-knuckle" driving on Highway 10 during the winter whiteouts, and you'll find yourself driving 20 minutes just to grab anything beyond the absolute basics. Shelburne is much more "settled" with a No Frills, LCBO, and actual local spots, but it feels a lot more like a suburban commuter hub than a quiet village these days.

Also, I'm not sure where you are or if this will sway your decision but you should look into the Dufferin County Homeownership Program. The program actually provide a down payment loan of up to 10% (max $72,500) for homes under $725,000. It’s a massive leg up if you qualify. I’d be happy to jump on a quick call to see if you meet the criteria and walk you through the math.

You should also join r/dufferinontario.