Royal LePage forecasts 7% decline in median price of single-family homes in Quebec’s popular ski regions in 2023
Higher interest rates and an expected increase in supply likely to result in price rebalancing
- Single-family home and condominium prices in Quebec’s popular ski regions up 14.2% and 33.2% year-over-year respectively, since the beginning of 2022.
- Among the regions surveyed, Mont-Tremblant posted biggest jump in median price for both single-family homes and condominiums.
- Five out of eight ski regions surveyed posted single-family home price increases of more than 15% in 2022.
- Only Sutton and Bromont regions recorded declines in the median price of single-family homes in 2022.
- According to a Royal LePage survey of U.S. citizens living in border states, Quebec is the second-most-preferred province, following Ontario, among those who own or plan to purchase a recreational home in Canada.
MONTREAL, November 29, 2022 – The median price of a single-family detached home in recreational real estate markets around the major ski hills in Quebec increased 14.3% to $488,600 since the beginning of the year, compared with the same period in 2021, according to the Royal LePage Winter Recreational Property Report.[1] This represents a year-over-year increase of $60,000. Meanwhile, the median price of a condominium located near one of the province’s main ski destinations increased 33.2% to $404,500 year-over-year; an increase of $100,800. The higher price increase for condominiums compared to the single-family segment is attributable to their greater affordability and to the popularity of rental units among buyers seeking to generate additional income and savings in the current inflationary environment.
In the first 10 months of the year, the number of detached single-family home transactions in the regions surveyed decreased by 30.2% year-over-year, while in the condominium segment, the decline was 34.7%, reflecting lower buyer demand, longer selling periods and the transition to a more balanced market.
Among the ski regions studied, the steepest increase in property prices province-wide was in Mont-Tremblant (Mont-Tremblant, Saint-Faustin–Lac-Carré and La Conception). The median price of a condominium in the region jumped 44.4% year-over-year to $475,000, between January and October 2022. Meanwhile, the median price of a single-family home rose 23.5% to $500,000 during the same period.
Conversely, two Quebec ski region markets saw a decrease in the median price of single-family homes. In the regions of Mont Sutton, including Sutton, Brome and Lac-Brome, the median price decreased 3.0% year-over-year to $548,000, since the beginning of 2022. Likewise, the median price of a single-family home in Bromont dipped 0.9% year-over-year to $586,000. This is a notable contrast to 2021, when Bromont stood out as the winter recreational market with the strongest growth in median property prices.
Forecast
Royal LePage is forecasting that the median price of a single-family detached home in Quebec’s popular ski regions will decline 7.0% over the next 12 months, to $454,398. The forecast is based on the expectation that this market segment will show a sharper decline in prices in 2023, compared with the province’s urban markets. Given that resort markets have experienced the highest price increases over the past two years, Royal LePage anticipates that they will be the most significantly affected by price corrections. A slow but steady increase in supply in this segment is also projected, as some owners attempt to offset their expenses by putting their cottages and secondary residences on the market. Further interest rate hikes are also likely to continue impacting demand for secondary residences in the coming year, since in many cases these properties are non-essential, luxury assets. Household debt driven by rising inflation and higher interest rates should therefore continue to impact people’s plans to buy homes, as their purchasing power will be diminished.
The recreational property segment is traditionally a buyer’s market, with little price fluctuation. The projected 7.0% decline in prices is consistent with a realignment of supply and demand, as the more recent surge in prices was unprecedented.
Impact of legislation banning purchases of residential properties by non-Canadians on recreational real estate markets
In its 2022 budget released on April 7th, the Government of Canada announced that it would be implementing a two-year ban on purchasing residential property in the country by non-Canadian citizens and non-permanent residents.[2] The ban is slated to come into effect on January 1, 2023. While vacation homes are expected to be exempt from this restriction, the announcement has had a significant impact on the buying intentions of U.S. citizens.
A recent Royal LePage survey of U.S. citizens living in border states,[3] conducted by Leger, found that 75% of those who currently own a recreational property in Canada said that they made their purchase after the two-year foreign buyer ban was announced. Of those who purchased following the announcement, 77% stated that the potential impacts of the ban on their ability to buy real estate in Canada after January 1, 2023, influenced their decision to purchase before the end of this year.
Quebec remains a popular destination among U.S. citizens living in border states. The survey found that 40% of respondents who currently own a recreational property in Canada have purchased in Quebec, ranking the province second behind Ontario. Among those planning to purchase a recreational property in Canada, 37% said they intend to purchase in Quebec, which is the second-most-popular destination, following Ontario in this category.
Among U.S. citizens in border states who are planning to purchase a recreational property in Canada, 67% say the current strength of the U.S. dollar has made them more inclined to buy.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Survey chart – 2022 Royal LePage Report on U.S. Recreational Property Buyers in Canada: rlp.ca/us-recreational-buyers-2022survey
REGIONAL SUMMARIES
Mont-Tremblant
(Mont-Tremblant, Saint-Faustin–Lac-Carré, La Conception)
From January 1st to October 31st, 2022, the median price of a single-family detached home in Mont-Tremblant increased 23.5% year-over-year to $500,000, compared to the same period in 2021, while sales dropped 38.1%. Meanwhile, the median price of a condominium in the region jumped 44.4% year-over-year to $475,000. Sales in the condominium segment shrank 47.8% in 2022.
For prospective buyers seeking a property slopeside or at mountain base, the current starting prices are around $1.2 million for a single-family detached home and $650,000 for a condominium.
Paul Dalbec, a chartered real estate broker with Mont-Tremblant Real Estate, a division of Royal LePage, says that the Mont-Tremblant real estate market is in the midst of transitioning from a seller’s market to a buyer’s market, which explains the sharp decline in sales. With interest rates moving higher, many potential buyers have adopted a wait-and-see attitude.
“The current slowdown should help shift the Tremblant housing market back to a more normal sales cycle,” Dalbec says. “I expect that in the coming months, slopeside luxury condos worth between $700,000 and $1 million, and single-family residences valued from $400,000 to $600,000 will be most affected by the price correction, as those properties appreciated much more during the pandemic.”
Dalbec says the announcement by the federal government in its April, 2022, budget speech of a ban on foreign housing investments in Canada may have dampened the spirits of some international buyers looking to purchase properties in Mont-Tremblant.
“Although recreational properties outside the major urban centres are expected to be excluded from the ban, until the measure comes into effect and the regulations are ratified, international buyers are in a grey area,” Dalbec explains. “The closure of the borders during the pandemic caused many Americans to sell their second homes in Canada as they could not enjoy them for an extended period of time.”
Royal LePage is forecasting that the median price of a single-family detached home in this region will decline by 10% over the next 12 months.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Mont Saint-Sauveur
(Saint-Sauveur, Morin-Heights, Piedmont)
From January 1st to October 31st, 2022, the median price of a single-family detached home in Mont Saint-Sauveur increased 19.7% year-over-year to $562,500, compared to the same period in 2021, while sales dropped 32.8%. Meanwhile, the median price of a condominium in the region increased 22.4% year-over-year to $382,300. Sales in the condominium segment decreased 32.3% in 2022.
For prospective buyers seeking a property slopeside or at mountain base, the current starting price is around $675,000 for a single-family home, and $395,000 for a condominium.
“The year 2023 should usher in better negotiating conditions between sellers and buyers,” predicts Éric Léger, chartered real estate broker with Royal LePage Humania, adding that sellers in the area have started reducing their asking price when the initial listing fails to attract buyers. “Buyers are showing more confidence, with many more of them making conditional offers – that’s something that had all but disappeared during the pandemic. Although the pandemic boom put many first-time buyers into competitive offer scenarios, the current demand comes from experienced buyers whose purchasing power is less affected by economic ups and downs.”
In the coming months, Léger expects to see a steady increase in supply in the region.
“I’m recommending that sellers try to be realistic about the property they intend to list,” he advises. “The first few weeks are critical when selling, and they allow you to take the pulse of the market. If you’re a buyer, take the time to define your search criteria, and be patient. The current market presents great negotiation opportunities for those ready to make a move.”
Royal LePage is forecasting that the median price of a single-family detached home in this region will decline 5.0% over the next 12 months.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Val Saint-Côme and Mont Garceau
(Saint-Côme, Saint-Donat)
From January 1st to October 31st, 2022, the median price of a single-family detached home in Val Saint-Côme and Mont Garceau (Saint-Donat) increased 17.9% year-over-year to $435,000, compared to the same period in 2021, while sales dropped 36.3%.
For prospective buyers seeking a property slopeside or at mountain base, the current starting prices are around $450,000 for a single-family detached home, and $300,000 for a condominium, although inventory is low in this segment.
“Properties in Lanaudière remain among the most affordable in Quebec’s ski regions, despite the significant increases of the past two years,” observes Éric Fugère, real estate broker with Royal LePage Habitations. “The current period should bring great opportunities for buyers, but even more importantly, time to choose wisely and negotiate fairly. Inventory is creeping up but remains limited, as potential sellers in the region – many of whom are secondary property owners – are waiting for economic conditions to improve and buyer demand to increase, before putting their homes on the market.”
Fugère emphasizes the importance of dealing with a real estate professional when selling or buying a recreational property, especially in the winter.
“There are so many things to be aware of if you’re planning to purchase a recreational property. Is the septic system up to code or due for replacement? Does the property include a shore protection strip, or is it located in a wetland area? What are the local municipal by-laws surrounding short-term rentals? A real estate broker can access all this information and offer their expertise, as well as request the necessary documentation on the property to get a clear picture of its condition,” he concludes.
Royal LePage is forecasting that the median price of a single-family detached home in this region will decline 12.5% over the next 12 months.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Bromont, Sutton (Sutton, Brome and Lac Brome) and Orford (Orford and Magog)
The recreational property markets in Bromont, Sutton and Orford posted uneven price changes from January 1st to October 31st, 2022. During this period, the median price of a single-family detached home in Mount Orford (Orford and Magog) increased 17.8% year-over-year to $470,000. In Bromont and Mont Sutton (Sutton, Brome and Lac-Brome), median prices for single-family homes declined 3.0% and 0.9%, to $586,000 and $548,000 respectively, during the same period. Meanwhile, sales declined 25.3%, 39.2% and 12.7% respectively, in Orford, Bromont and Sutton. During the same period, the median price of a condominium climbed 19.5% year-over-year to $498,500 in Bromont, and 16.9% year-over-year to $291,000 in Orford, while sales were down 12.5% and 27.4%, respectively.
For prospective buyers seeking a property slopeside or at mountain base, starting prices currently range from $650,000 to $950,000 for a single-family home and from $450,000 to $650,000 for a condominium.
“The runaway home price increases we saw in the Eastern Townships between 2020 and the first half of 2022 have resulted in a migration of demand toward less congested and less expensive markets,” explains Véronique Boucher, real estate broker with Royal LePage Au Sommet. “Some real estate markets like Bromont reached record high appreciation, which explains why prices have stabilized this year, to the benefit of other, more affordable areas a bit farther away, like Orford. In the condo market, demand for rental assets has contributed to price growth in recent years in Orford, due to the potential for additional income from short-term rentals, as well as strong resale value.”
Looking ahead to the new year, Boucher expects that price appreciation in 2023 will depend greatly on the number of new listings on the market. If there is more inventory, it could give buyers more leverage for negotiating. Given that interest rates will remain relatively high, prices should continue to taper off for the first half of the year.
Royal LePage is forecasting that the median price of a single-family detached home will decline 5.5% in Bromont, 4.0% in Sutton, and 3.0% in Orford over the next 12 months.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Stoneham/Lac-Beauport (Stoneham-et-Tewkesbury, Lac Delage, St-Gabriel-de-Valcartier, Lac-Beauport) and Mont-Sainte-Anne (Beaupré, Sainte-Anne-de-Beaupré, Saint-Ferréol-les-Neiges, Saint-Joachim)
From January 1st to October 31st, 2022, the median price of a single-family detached home near the ski slopes in Stoneham and Lac-Beauport increased 15.9% year-over-year to $475,300, compared to the same period in 2021, while sales slipped 26.5%.
For prospective buyers seeking a property slopeside or at mountain base, the starting price is currently around $700,000 for a single-family home, and $300,000 for a condominium.
From January 1st to October 31st, 2022, the median price of a single-family detached home in Mont Sainte-Anne rose 4.1% year-over-year to $286,200, compared to the same period in 2021, with sales decreasing 26.6%. Meanwhile, the median price of a condominium in the region rose 16.0% year-over-year to $145,000. Condominium sales increased 10.4% during the same period.
For prospective buyers seeking a property slopeside or at mountain base, the starting price is typically $700,000 for a single-family home, and $300,000 for a condominium.
“The runaway growth in recreational property prices over the past two years was bound to come to an end,” says Marc Bonenfant, chartered real estate broker with Royal LePage Inter-Québec. “We’ve entered an adjustment phase in the recreational areas of the Capitale-Nationale region, and we should soon see more balance between supply and demand. That means prices will continue to soften through the rest of this year and well into 2023. We will likely see selling times continue to lengthen, although days on market remain below average for the region over the past decade.”
According to Bonenfant, the challenge in the current market is the small number of comparable properties sold, which makes it difficult to establish a fair list price. A property that is priced too high – based on comparable values over the past 6 to 12 months, or when the market was booming – will likely detract buyers or bring in offers below asking.
“The high-end segment of the market has been less affected by the interest rate increases, because many buyers don’t require financing as a condition of purchase. But that scenario could change with continued rate hikes, which will affect purchasing power among the lower tier of luxury property buyers,” Bonenfant concluded.
Royal LePage is forecasting that the median price of a single-family detached home will decline 10% in the Stoneham/Lac-Beauport market, and 8% in the Mont-Sainte-Anne market over the next 12 months.
Data chart – Royal LePage 2022 Winter Recreational Property Report (Province of Quebec): rlp.ca/table_2022winterrecreationalreport_QC
Survey chart – 2022 Royal LePage Report on U.S. Recreational Property Buyers in Canada: rlp.ca/us-recreational-buyers-2022survey
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About the Royal LePage Winter Recreational Property Report
The 2022 Royal LePage Winter Recreational Property Report compiles insights, data and forecasts from 8 popular ski regions in the province of Quebec. Median price and sales data was compiled via Centris and analyzed by Royal LePage for the period between January 1, 2022 and October 31, 2022 and January 1, 2021 and October 31, 2021. Data availability is based on a transactional threshold and whether regional data is available using the report’s standard housing types.
About the Leger survey
An online survey of 1506 U.S. citizens over the age of 18 living in border states (Maine, New York, Vermont, Pennsylvania, Michigan, Ohio, Wisconsin, Minnesota, North Dakota, Montana, Washington, New Hampshire, Idaho, Oregon, Massachusetts, Indiana and Illinois) was completed between November 8th to November 14th, 2022, using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 1506 respondents would have a margin of error of +/-2.5% on n=1500.
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of approximately 20,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.
Media contact:
Lara Berguglia
North Strategic on behalf of Royal LePage
lara.berguglia@northstrategic.com
514 994-2382
[1] Data compiled by Royal LePage through Centris for the period January 1 to October 31, 2022, in comparison with the same period in 2021. The regions were selected by considering the largest residential real estate markets around the main ski hills in Quebec. Province-wide results were derived from a weighted average of all surveyed regions, rounded to the nearest hundred.
[2] Government of Canada, https://www.budget.canada.ca/2022/report-rapport/chap1-en.html#m23
[3]An online survey of 1506 U.S. citizens over the age of 18 living in border states (Maine, New York, Vermont, Pennsylvania, Michigan, Ohio, Wisconsin, Minnesota, North Dakota, Montana, Washington, New Hampshire, Idaho, Oregon, Massachusetts, Indiana and Illinois) was completed between November 8th to November 14th, 2022, using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 1506 respondents would have a margin of error of +/-2.5% on n=1500.
