The price of waterfront cottages, coveted properties, fell by nearly 8.3% in 2023 in the wake of high interest rates, according to a Royal LePage report released Wednesday.
The median price of a single-family home located on the waterfront stood at $424,900 in Quebec vacation spots, according to a review by the brokerage firm.
Properties on the waterfront still have a strong appeal among buyers who aspire to purchase a second home, judges Éric Léger, real estate broker in the Laurentides sector at Royal LePage. “I simply think that it was consumers’ budgets that made them go for something that was more affordable,” he explains in an interview.
The location of transactions carried out in 2023 could also explain this drop, adds Annick Fleury, broker in the Outaouais region for the same brand.
She notes that more clients favor lakes further from major centers, in order to have more privacy. The price of these properties is generally lower.
“It allows for a slightly lower “waterfront” budget, but it doesn’t necessarily mean that the value of homes decreases along the lakes,” she adds.
Overall, the median price saw slight gains for single-family properties in major resort markets, despite rising interest rates. The median price increased by 2.6% in 2023 to $396,900.
Prices had experienced significant increases during the pandemic and they stabilized in 2023, summarizes Véronique Boucher, broker in the Estrie region at Royal LePage. “The recreational market is still doing well despite the economic context which is a little different from other years. »
However, activity moderated in the recreational property market, despite prices remaining stable. 6,956 single-family homes were sold in resort markets in 2023. This represents a decrease of 11% compared to last year.
The three brokers note that transaction times are longer than during the euphoria of the pandemic, but this situation of overbidding and haste was unusual.
The 2024 outlook
In its report, Royal LePage predicts that the median price of a single-family property in recreational areas will increase by 2% in 2024.
The firm anticipates that hopes of lower interest rates should provide a boost to resort markets. “I have the impression that this will encourage those who were perhaps waiting to know if the mortgage rate was going to increase,” comments Mme Fleury.
“Because if interest rates fall further, demand will be even greater,” she explains. Then at that time, the rivalry between buyers will again manifest itself as we have already experienced. »
Some owners will also think about their mortgage renewal in 2025. For those who made their purchase during the pandemic for a five-year term, the renewal should be done at a significantly higher rate.
Some homeowners may choose to sell their second home rather than see their budget eat into an increase in their mortgage payments.
It would not be “the majority of people, perhaps not so much in the recreational sector either, but some people will have to plan for the future”, underlines Mme Butcher. “So we will probably be lucky to have a better inventory of houses to offer to clients,” she predicts.