The craze of recent years for cottages is fading as the real estate market cools. Home prices near popular ski areas in Quebec are expected to decline about 7% over the next year, according to a new report from Royal LePage released Tuesday. The drop in prices across Canada should be less steep, at the equivalent of 3%.
Across Quebec, the median price of a chalet near a ski resort has increased by about 14% this year compared to 2021, to reach $488,600. This improvement should however disappear next year, when the median price should decrease to $454,398, forecasts the real estate brokerage firm.
Some regions will be more affected than others by price cuts. At the top of the list, chalets around Val Saint-Côme and Mont Garceau, where the median price is expected to decrease by 12.5% in 2023 compared to this year. This is followed, in descending order, by the regions of Mont-Tremblant (-10%), Stoneham and Lac-Beauport (-10%), Mont Sainte-Anne (-8%), Bromont (-5.5 %), Mount Saint-Sauveur (-5%), Mount Sutton (-4%) and Mount Orford (-3%).
“We have reached a peak,” says Eric Léger, chartered real estate broker at Royal LePage Humania, in the Laurentians. “For two years, prices have risen sharply and here we are at the top of the mountain. Is the descent as steep as the ascent? The answer is no. It’s normal to see an adjustment taking place, ”he says.
In most regions, the median price in 2023 should remain higher than that of 2021, but the regions of Bromont, Sutton and Mont Saint-Anne are exceptions.
Negociation power
“I would say that the buyer has more bargaining power today, assesses Mr. Léger. Buyers are more confident and are much more likely to make conditional purchase offers, which we hardly saw anymore during the pandemic. We also see fewer multiple offers, but it depends on the type of product,” he explains.
Currently, sellers are already reducing their selling price when the initial marketing does not find a buyer, notes Mr. Léger, which can lead to “very attractive” price reductions for buyers. “In some cases, we see reductions of $30,000, $50,000, or even $100,000 in certain value ranges,” illustrates the broker.
And concerning the new owners who bought recently, there is no need to worry, believes Mr. Léger. “Real estate is not a short-term investment. If we look at the last few years, real estate portfolios have been very profitable investments,” he adds.
Very expensive in the rest of Canada
Across Canada, the median price of a cottage is still much higher than in Quebec. In 2022, it reached $1,042,700, up 15% from the previous year. While prices for Canadian cottages will generally hold up better than in Quebec in 2023, they should still fall by 3%, according to Royal LePage, while the median price should stand at $1,011,451. ‘next year.
In British Columbia, cottages in Whistler will experience a 10% drop in prices, as in Revelstoke (-10%) or Invermere (-8%). But in some areas, prices should instead continue to climb, such as Mount Washington and the Comox Valley (+8%), Vancouver Island, Sun Peaks (+8%) and Big White (+7%).
American buyers are rushing
Following the Trudeau government’s announcement, in its 2022 budget, to ban the purchase of non-recreational properties by foreigners for a period of two years from 1er January 2023, many Americans would have rushed to buy a chalet in Canada before the entry into force of this measure… Even if it does not concern this type of property.
According to a recent survey conducted by Léger on behalf of Royal LePage among American citizens living in the border states, 75% of them who currently own a cottage in Canada said that they made their purchase following the announcement of This measure.
This survey was conducted between November 8 and 14 among 1,506 American citizens over the age of 18 living in states bordering Canada.
Regarding the median price data for the main ski regions in the country, these were compiled and analyzed by Royal LePage during the period from 1er January 2022 to October 31, 2022, compared to the same period in 2021.