Quebec’s winter resort regions, renowned for their snowy panoramas and exceptional slopes, experienced a sustained rise in recreational property prices in 2023. Despite the year’s economic downturn, the real estate market near the province’s main ski areas held up well.
According to the Royal LePage 2023 Winter Recreational Property Report, the first 10 months of the year saw a 7.8% increase in the median price of a single-family detached home in the province’s winter recreational markets, compared to the same period in 2022, reaching $501,600. However, there are signs that property prices are stabilizing, and will do so throughout 2024. This trend is unfolding amidst rising interest rates and a higher cost of living, both of which appear to be dampening market demand.
Quebec’s winter resort markets responded unevenly to 2023’s rising interest rate environment. Of all the regions surveyed, Mont Sutton emerged as the undisputed leader, posting a strong 27.3% year-over-year price appreciation for single-family detached homes during the first 10 months of 2023. . During the same period, the real estate markets near Mont-Tremblant and Mont Saint-Sauveur saw the median price of a single-family recreational home increase 7.8% and 6.7%, respectively, year over year to $539,000 and $600,000.
The condominium segment is not to be outdone. The most significant increase in the province for this property type was recorded in Mont Sainte-Anne, where the median price rose 83.4% year over year, reflecting the wide disparity in property styles and the scarcity of properties for sale in the region. In the Eastern Townships, the median price of a condominium rose 11.3% and 4.8% in Bromont and Mont Orford, respectively, to $555,000 and $305,000 during the same time period. In the Laurentians, however, the median price of a condominium slipped 2.1%, and decreased 6.5% in Mont-Tremblant and Saint-Sauveur, respectively, to $465,000 and $357,500. Challenges lie ahead in the recreational condominium segment, with the tightening of short-term rental restrictions in some of Quebec’s resort regions, which is set to reduce demand for investment properties.
“The rush of urban households into recreational real estate markets, which marked the pandemic years, has subsided. However, this era has contributed to the long-term popularity of these regions, as they have had to adapt their local services and infrastructures to a rapidly growing population,” said Dominic St-Pierre, vice-president and general manager of Royal LePage in Quebec. “Even though the inventory of properties available for sale was up this year, the scarcity of supply compared to demand continued to maintain prices, particularly in the first half of the year. Then, consumer caution in the face of higher borrowing costs slowed activity at the start of the summer season.”
The rise in recreational property prices was, however, accompanied by a contrasting sales picture in 2023, as the Bank of Canada continued to increase its key lending rate until July, altering the purchasing behaviour of aspiring buyers and homeowners. The number of single-family detached recreational home transactions in the province declined 8.5% over the reporting period, and 22.8% in the condominium segment, echoing the wait-and-see approach of many buyers who chose to put their plans on hold, hoping for better days to acquire a home in one of the province’s most desirable winter resort regions.
Forecast
Although it is widely expected that the Bank of Canada will keep its overnight lending rate stable for most of 2024, Royal LePage expects that the pressure exerted by recent interest rate hikes and increased inflation on households’ budgets will continue to weaken their purchasing power and, consequently, curb property price appreciation, particularly in resort markets where most properties are secondary residences. In the current economic climate, secondary residence owners may make concessions to avoid accumulating unmanageable debt and put their property on the market instead of renewing their mortgage at a much higher rate. However, the scarcity of homes for sale in the province’s winter recreational markets will prevent prices from sliding downward in most sectors.
According to Royal LePage, the price of a single-family detached home in the province’s alpine markets will increase modestly by 1.8 % to $510,629 over the next 12 months. This forecast is based on stable interest rates for most of 2024 or a modest decline.
For more information on current trends and forecasts in 10 of Quebec’s most popular winter recreational markets, click on the links below.
