The cottage market shaken by rising rates and the end of the pandemic
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Chalets at Mont Saint-Anne
According to a report by Royal LePage, the price of a property in recreational areas will decrease by 8% in 2023 compared to 2022, province-wide. However, the Capitale-Nationale region seems to be doing well for the moment.
By comparison, in 2022 the price of a single-family home in major recreational markets was up 16.1% from 2021. But after years of pandemic blowing in the sails of the cottage market, the tide is turning. in 2023 and several of the markets under study are already experiencing a decrease in prices.
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It must be recognized from the outset that the market has risen in a dazzling fashion in recent years. It is not yesterday that we know that everything that goes up comes down. At some point, people's borrowing capacity reached a certain level, especially with rising interest rates, says Marc Bonenfant, licensed residential and commercial real estate broker for Royal LePage.
According to him, the recreational housing stock in the MRCs of Jacques-Cartier and Côte-de-Beaupré is still less affected by the decline due to the low inventory of properties for sale.
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We don't really feel it yet, but we see that we have a decrease in the volume of calls and therefore a decrease in the number of visits and the number of purchase offers, but the market is doing well. It's what we experienced over the past 24 months that was totally abnormal, says the broker who works in these two RCMs.
On the other hand, we will have to wait for the mortgage renegotiations of the next few years to see if those who bought during the pandemic will be able to face the new interest rates or if they will flood the inventory of the real estate market, warns Marc Bonenfant.
Royal LePage also conducted a survey of brokers. A large majority of these respondents observed a drop in buyer demand compared to the same period last year. A majority of them also indicate that sales times have increased for this type of property.
During this pandemic real estate bubble, of course, the supply was lower than demand and the market ignited, so I think that eventually we are heading towards a return to normal, adds Marc Bonenfant.
A rental chalet in Charlevoix (archive photo)
A drop in enthusiasm in the rental market is also being felt. People thought it was okay to advertise a cottage and rent it in four seconds, but once Quebecers had the chance to fly, there was an impact on the rental of short-term vacation homes, notes the broker.
The fall of the gondola and the subsequent closure for several months of the Mont-Sainte ski resort -Anne had an effect on short-term cottage rentals, especially during the holidays.
However, in terms of sales, the picture is different and the attractiveness of the sector continues not. It's surprising, but at Mont Sainte-Anne, the market is on fire, it is doing extremely well. We know that eventually there is someone who will invest money in this mountain, says Marc Bonenfant.