Early spring, combined with anticipation of lower interest rates, will boost demand in the recreational real estate market in 2024
Royal LePage® predicts that the improved mortgage rate environment will modestly boost home prices in Quebec’s recreational markets in 2024
Highlights:
- In 2023, the weighted median price of a single-family home in Quebec’s major resort markets appreciated by 2.6% compared to 2022, to $396,900
- In the province, the weighted median price of a single-family waterfront property decreased 8.3% in 2023 versus 2022, to $424,900
- The weighted median price of a standard condominium in recreational regions studied remained stable, increasing 1.0% compared to 2022, to $328,100
- 91% of Royal LePage recreational property experts in the province expect activity in their market to intensify when the Bank of Canada lowers interest rates
- The end of financing for the purchase of properties in 0-20-year flood zones, effective February, 2024, is causing concern in some recreational areas of the province
- Royal LePage forecasts that the median price of a single-family home in Quebec’s recreational regions will increase 2.0% in 2024, compared to 2023, to $404,838
MONTREAL, March 20, 2024 – According to the Royal LePage® 2024 Spring Recreational Property Report, the imbalance between supply and demand continued to favour sellers over the past year in most Quebec resort markets, causing modest price appreciation despite the difficult economic environment. The reduced purchasing power of buyers, brought on by repeated interest rate hikes over the past two years, was the main drag on more sustained price increases in recreational markets, while potential buyers remained on the sidelines until the economic horizon brightened.
“Property buyers’ patience was thoroughly tested in 2023, including in our resort markets,” explained Dominic St-Pierre, Senior Vice President, Business Development, Royal LePage. “With interest rates and the cost of living on the rise, households’ discretionary spending has been affected, and many people have put their plans to buy a primary or a secondary residence on hold, waiting for a more favourable mortgage environment before taking the next step. However, the early arrival of spring, combined with the expectation of a downward adjustment in interest rates over the coming months, should lead to a buoyant market this year.”
In 2023, the weighted median price[1] of a single-family home in the province’s major recreational markets rose 2.6% year over year to $396,900. Over the same period, the weighted median price of a single-family waterfront property recorded an 8.3% decline to $424,900, while at the same time, the weighted median price of a standard condominium in recreational markets remained stable, increasing 1.0% in 2023, compared to 2022, to land at $328,100.
According to a survey of Royal LePage experts working in the province’s resort real estate markets,[2] 87% said that recreational property buyers require purchase financing. Meanwhile, when asked about the impact of expected interest rate cuts on demand for recreational properties in their region, 91% of respondents said they expect an increase in demand, including 10% who believe activity will increase significantly.
“You’d think that homebuyers in resort markets would be less concerned about interest rate fluctuations. However, the majority of recreational property buyers are financed, either for the full market value or for a fraction of it,” said St-Pierre. “The slowdown in buyer demand in these markets in 2023 was therefore also impacted by rising borrowing costs, which reached a 20-year high this year.”
According to the survey, the majority of respondents (55%) said their clients use their properties as a second home, 19% said owners in their area live there year-round as their primary residence, 13% said the properties are used partly for vacation and partly for rental purpose to generate income, and 6% indicated that the properties are used solely as rental properties (short- or long-term) with the aim of generating income.
“Demand for short-stay properties in our largest resort markets has peaked in recent years, alongside the health restrictions imposed by the COVID-19 pandemic and the desire to get closer to nature and the great outdoors,” said St-Pierre. “Many Quebec municipalities have seen the need to tighten their regulations on short-term rentals in order to better control the impact of tourism on local communities, and to ensure that the quality of life for existing residents is protected. These regulatory restrictions, combined with rising interest rates between 2022 and 2023, have had a notable impact on demand for this type of property investment.”
The survey also revealed that the majority of buyer demand for recreational properties comes from those aged 50-64 years olds, according to 58% of experts, followed by 35-49 year-olds (39%).
Days on market increase as demand weakens
Royal LePage’s network advisor survey revealed that 45% of respondents reported demand for recreational properties has weakened in their respective regions compared to 2022, while 39% said it has remained stable and 13% believe it has increased. Among experts surveyed, 42% noted an increase in the number of properties on the market, while an equal number (42%) reported similar supply levels as last year. Another 13% noted a decrease in inventory in their region.
The impact of climate change
In recent years, several regions of Quebec have been heavily impacted by the effects of global warming. More specifically, snowmelt led to flooding in 2017 and 2019 in the riverside regions of Outaouais, the Island of Montréal, Montérégie, and more recently, the Charlevoix region in 2023. These increasingly frequent events have also triggered a major change in the mortgage industry.
On February 1st, Desjardins Group – then, the only lender to offer financing for buyers of high-current riverfront properties, better known as 0-20-year flood zones – put an end to this type of lending, citing the increasingly high risk of acquiring real estate in these zones.
“It is difficult to assess the direct impact of this decision on the real estate market at present. In the short term, it may change the criteria for finding properties in the affected municipalities. In markets that are home to these types of shorelines, there is palpable concern and hope for solutions that will enable existing homeowners, for whom their residence could be their largest financial asset, to preserve their property and its value,” said St-Pierre. “The impacts of climate change will become increasingly part of our daily lives, and it’s fundamental that all levels of government work together to establish viable ways to support and protect those communities that are coping with the direct consequences of these environmental changes.”
Forecast
As the downward adjustment in interest rates looks increasingly within reach in 2024, Royal LePage expects a resurgence in real estate demand in Quebec’s resort markets, namely from buyers who have been waiting for lower interest rates to return to the market to acquire a property. At the same time, sellers will be taking the opportunity to put their properties on the market, and will be trying to get the best possible price, relying on increased competition from buyers. This surge of activity is likely to occur early this spring, as winter weather has quickly given way to warmer temperatures.
“The modestly more favourable mortgage environment expected in 2024 should stimulate demand and price appreciation in our main recreational markets in Quebec, but we don’t expect values to soar this year,” said St-Pierre. “Interest rates remain above historical norms of the past 20 years. When rate cuts begin, even a small decrease will put further upward pressure on home prices. Supply will increase slightly, but should be quickly absorbed, as inventory remains insufficient to meet demand in all four corners of the province.”
St-Pierre added one caveat: “As we head towards the 2025 peak of mortgage renewals from residential real estate purchases made during the pandemic, it would not be surprising to see a cohort of homeowners put their properties up for sale early to reduce their indebtedness, even if it means downgrading to a more modest residence.”
Royal LePage forecasts that the median price of a single-family home in Quebec’s recreational regions will increase 2.0% in 2024, compared to 2023, to $404,838.[3]
Regional Summaries
Outaouais
Collines-de-l’Outaouais and Papineau (RCMs)
In 2023, the median price of a single-family home in the Collines-de-l’Outaouais RCM increased 2.0% compared to the same period in 2022, to reach $527,000, while in the Papineau RCM, a decrease of 6.1% was recorded, compared to the same period in 2022, to reach $287,500. Over the same period, the single-family waterfront property segment saw an increase of 1.1% and 0.6%, respectively, to reach $505,400 in the Collines-de-l’Outaouais RCM and $403,000 in the Papineau RCM.
“The spring market for recreational properties is shaping up to be an active one in the Outaouais region,” said Annick Fleury, residential real estate broker, Royal LePage Vallée de l’Outaouais. “The anticipation of a possible drop in interest rates has buyers getting ready to enter the market. Already, financial institutions have adjusted their mortgage rates, which is contributing to early activity in the real estate market.”
Fleury noted that among the region’s second-home buyers, many are refinancing their current properties to free up funds for a down payment for their vacation home, which is why a significant proportion of buyers are paying in cash.
For 2024, Fleury expects pent-up demand from buyers who have been on the sidelines waiting for more favourable economic conditions to resume their real estate pursuits, to regain ground and drive up property values.
“Buyers will be inclined to return to the market to take advantage of lower interest rates, and sellers will see the perfect opportunity to put their properties on the market and take advantage of greater competition between buyers. 2024 should be favourable for both sides of the transaction,” she concluded.
In 2024, the median price of a single-family home in the Collines-de-l’Outaouais and Papineau RCMs is expected to increase 4.0% and 3.5%, respectively, compared to 2023.
The Laurentians
Les Pays-d’en-Haut and Les Laurentides (RCMs)
In 2023, the median price of a single-family home in the Pays-d’en-Haut RCM increased 1.6% over the same period in 2022, reaching $500,000. In the neighbouring Les Laurentides RCM, appreciation for the same property type rose 6.3% over the same period, to $425,000. The median price of a standard condominium in Pays-d’en-Haut RCM decreased 2.4% to $336,800 in 2023, compared to 2022. The median price for the same property type in Les Laurentides RCM remained completely flat, at $425,000. Over the same period, the median price of a single-family waterfront property in Les Pays-d’en-Haut and Les Laurentides RCMs declined 2.2% and 5.2% to $587,000 and $502,500, respectively.
“In the region, the spring market has already kicked off,” said Éric Léger, chartered real estate broker, Royal LePage Humania. “The early return of warm weather is bringing a little more activity to real estate listings every week, and the supply of properties is growing. We’re gradually getting back to balance: buyers have been on the sidelines as interest rates have risen, waiting for their personal finances to improve, and sellers have been more flexible on pricing. If the Bank of Canada goes ahead with its first rate cut this spring, this pent-up demand will be quickly released. Prices are expected to continue to rise, as supply remains insufficient in relation to demand, but this appreciation will be moderate.”
In 2024, the median price of a single-family home in Les Pays-d’en-Haut and Les Laurentides RCMs is expected to increase 3.0% and 4.0%, respectively, compared to 2023.
Argenteuil and Antoine-Labelle (RCMs)
In 2023, the Argenteuil and Antoine-Labelle RCMs saw an increase in the median price of single-family homes of 6.5% and 9.1% compared to 2022, reaching $345,000 and $300,000, respectively. Over the same period, single-family waterfront properties also saw their median price appreciate by 8.0% and 2.6% respectively, to $475,000 and $369,500.
“Property price appreciation in the region over the past year is catching up to the valuation of more popular markets in the Laurentians,” said Pierre Vachon, residential and commercial real estate broker, Royal LePage Humania. “Proximity to nature has always been an attraction, but it became a need during the pandemic, allowing people to discover new parts of the province that had previously remained a well-kept secret. Areas like Brownsburg-Chatham, just off Highway 50, are now undergoing new developments and attracting buyers from Ottawa, Gatineau and Montreal. In any case, demand here continues to outstrip supply, and this is reflected in price appreciation.”
In 2024, the median price of a single-family home in the Argenteuil and Antoine-Labelle RCMs is expected to increase 2.0% and 1.5%, respectively, compared to 2023.
Lanaudière
Matawinie and Montcalm (RCMs)
In 2023, the median price of a single-family home in the Lanaudière RCMs of Montcalm and Matawinie fell 2.8% and 1.5%, respectively, to $365,000 and $320,000, compared to the same period in 2022. During the same period, single-family waterfront properties saw median prices fall 15.7% and 4.7%, respectively, to $319,000 in Montcalm and $403,000 in Matawinie. In the Matawinie RCM standard condominium market, the median price remained unchanged (0.0%) in 2023, compared to 2022, reaching $275,000.
“The Lanaudière recreational real estate market turned more sluggish this year, as the absence of snow had the effect of curbing winter activities such as snowmobiling,” explained Éric Fugère, residential real estate broker, Royal LePage Habitations. “Market dynamics still favour sellers, who prefer to hold their prices and wait for the right opportunity to present itself. As a result, days on market are increasing.”
Fugère expects the market to recover towards the end of spring.
In 2024, the median price of a single-family home in the Matawinie and Montcalm RCMs is expected to decrease 1.0% and 1.5%, respectively, compared to 2023.
Eastern Townships
Bromont and Memphrémagog (RCM)
In 2023, the median price of a single-family home in Bromont increased 2.0% over the same period in 2022, to $675,000. In the Memphrémagog RCM, the median price for the same property type fell 1.2% over the same period, to $510,000. The median price of a standard condominium in Bromont and the Memphrémagog RCM increased 8.4% and 6.9%, respectively, to $555,000 and $320,800. Over the same period, the median price of a single-family waterfront property in the Memphrémagog RCM fell 1.3% to $849,000.
“Recreational markets in the Eastern Townships held their own in 2023, despite higher borrowing costs and inflation,” said Véronique Boucher, residential real estate broker, Royal LePage Au Sommet. “Prices held firm, but days on market increased, prompting sellers to negotiate down from the list price. Given the reduced purchasing power of buyers, a slowdown in demand was felt, particularly in the mid-range property segment. In the entry-level market, demand remains strong, and it’s becoming difficult, especially for our first-time buyers, to find something within their budget, as competition remains tight.”
Boucher expects the market to pick up quickly this spring, particularly in the waterfront property segment where demand remains high. She is perplexed about the announcement regarding the end of financing for homes in 0-20-year flood zones.
“With regard to the end of mortgage financing for properties in high-current flood zones, buyers may want to consider changing their approach when looking for real estate in these regions. Even if these areas are few and far between, it is highly necessary that our governments take steps to address these environmental issues,” she added.
In 2024, the median price of a single-family home in the Memphrémagog RCM and in Bromont is expected to increase 2.0% and 3.0%, respectively, compared to 2023.
Chaudière-Appalaches
Appalaches (RCM)
In 2023, the median price of a single-family home in the Appalaches RCM showed an increase of 6.5% compared to the same period in 2022, reaching $180,000.
“Here, it seems that rising interest rates haven’t slowed down the recreational property market,” said Mélissa Roussin, residential and commercial real estate broker, Royal LePage Blanc & Noir in Thetford Mines. “Even though the pandemic’s cottage rush is over, we continue to welcome buyers from the province’s major urban centres, including Montreal. We’re also seeing a good number of people nearing retirement who are buying recreational properties to eventually live in full-time.”
Regarding the prices of recreational properties, Roussin notes: “A property located near large lakes, such as Grand lac Saint-François, can easily fetch a million dollars, given its highly sought-after location.
“The Appalaches region offers a huge playground for nature and outdoor enthusiasts, with its many lakes, mountains and wide-open spaces, as well as its proximity to major cities like Quebec City and Sherbrooke,” added Roussin.
In 2024, the median price of a single-family home in the Appalaches RCM is expected to increase 2.5%, compared to 2023.
Capitale-Nationale
Charlevoix (RCM)
In 2023, the median price of a single-family property in the Charlevoix RCM appreciated considerably, rising 16.0% year over year to $380,000.
“Although rising borrowing costs have slowed activity in the real estate market, Charlevoix’s strong reputation and unique character, combined with limited supply, have pushed property prices higher over the last year,” said Jean-François Larocque, residential and commercial real estate broker, Royal LePage Inter-Québec.
With regards to the withdrawal of financing for properties located in 0-20-year flood zones, Larocque is calling on local governments to get involved in finding solutions, especially since many homeowners are still waiting for financial assistance to restore their homes, following the flooding caused by spring thaw in Baie-Saint-Paul in May, 2023.
Looking ahead to the spring market, Larocque believes that a change in the Bank of Canada’s monetary policy direction will give buyers more opportunity to find a property that meets their needs.
In 2024, the median price of a single-family home in the Charlevoix RCM is expected to increase 4.5%, compared to 2023.
Côte-de-Beaupré and Jacques-Cartier (RCMs)
In 2023, the median price of a single-family home in the Côte-de-Beaupré RCM decreased 1.6%, compared to 2022, reaching $315,000, while in the Jacques-Cartier RCM region, a modest increase of 3.6% was recorded, compared to the same period last year, reaching $399,000. Over the same period, the Côte-de-Beaupré standard condominium segment saw a sharp 20.5% rise in median price, to $195,000, while the same property type in the Jacques-Cartier region saw a 6.0% drop, to $225,500. For single-family waterfront properties in the Jacques-Cartier RCM, the median price fell 8.9%, to $430,000.
According to Marc Bonenfant, residential and commercial real estate broker, Royal LePage Inter-Québec, activity in the recreational real estate market in the Capitale-Nationale municipalities is returning to a certain seasonal normalcy.
“Compared to previous years, this year’s recreational real estate market has been characterized more by the usual seasonal cycle, with activity intensifying as the months go by and buyers returning to the market in a more pronounced way as soon as the weather warmed up in recent weeks,” he said. “Sellers who are taking advantage of the scarcity of properties for sale, especially near navigable waterways, are holding firm on their prices, which is contributing to slowing the market’s momentum. At the other end of the spectrum, some sellers who purchased their properties during the pandemic boom, are trying to put them up for sale, unable to keep up with rising monthly mortgage costs.”
In 2024, the median price of a single-family home in the Côte-de-Beaupré and Jacques-Cartier RCMs is expected to increase 3.0% and 4.0%, respectively, compared to 2023.
Gaspésie – Îles-de-la-Madeleine
Côte-de-Gaspé (RCM)
In 2023, the median price of a single-family home in the Côte-de-Gaspé RCM decreased 2.4% compared to the same period in 2022, reaching $239,000.
“Buyers’ anticipation of lower interest rates was palpable during January and February on the Côte-de-Gaspé, which experienced renewed activity in the real estate market. It has to be said that rising mortgage costs have taken a heavy toll on the purchasing power of buyers in the region, particularly first-time buyers, as salaries remain among the lowest in the province,” said Christian Cyr, residential and commercial real estate broker, Royal LePage Village. “The downward adjustment in interest rates should provide some breathing room, but with the supply of properties still insufficient, I expect prices will continue to rise.”
Cyr noted that the region’s aging population is adding to the pressure on the housing shortage. Without a sufficient supply of rental housing, seniors are staying in their existing homes, further reducing the number of properties available for sale. Meanwhile, new developments for recreational and tourist residences are coming online in some areas.
“We’ve noticed a growing demand for land, in particular among resort community developers in the region. That said, several Gaspesian municipalities have recently tightened regulations on short-term rentals. It will be interesting to see the impact on real estate activity over the next year.”
In 2024, the median price of a single-family home in the Côte-de-Gaspé RCM is expected to increase 5.0%, compared to 2023.
Data chart – Recreational Property Prices (2023) and Forecast (2024) – Province of Quebec:
rlp.ca/table_2024springrecreationalpropertyreportQC
About the Royal LePage Spring Recreational Property Report
The Royal LePage Spring Recreational Property Report compiles insights, data and forecasts from 15 real estate markets in Quebec. Median price data was compiled and analyzed by Royal LePage for the period between January 1, 2023, to December 31, 2023, and January 1, 2022, to December 31, 2022. Data was sourced through Centris. Royal LePage’s provincial weighted median home prices and forecast are based on a weighted model using sales in each region. Methodology is consistent with previous reports, which used the label ‘aggregate’. Data availability is based on a transactional threshold and whether regional data is available using the report’s standard housing types. Prices may change from previous reports due to a change in the number of participating regions.
About the Royal LePage Recreational Property Advisor Survey
A provincial online survey of 31 real estate brokers serving buyers and sellers in recreational areas across Quebec. The survey was conducted between February 24, 2024 and March 12, 2024.
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 670 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage® Shelter Foundation™, which has been dedicated to supporting women’s shelters and domestic violence prevention programs for 25 years. 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.
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[1] Royal LePage’s provincial weighted median home prices are based on a weighted model using sales in each region. Methodology is consistent with previous reports, which used the label ‘aggregate’.
[2] A provincial online survey of 31 real estate professionals serving buyers and sellers in Quebec’s recreational property regions was conducted between February 24, 2024 and March 12, 2024.
[3] Royal LePage’s provincial forecast is a weighted median based on a weighted model using sales in each region. Methodology is consistent with previous reports, which used the label ‘aggregate’.
