Rising interest rates and other cooling measures have tamed activity in the Laurentians region of Quebec, a popular second-home market.

Set on 106 wooded acres in Val-des-Lacs, a village in the Laurentians mountain range of southern Quebec, Canada, this five-bedroom, three-bathroom home enjoys panoramic views of the mountains, the adjacent Archambault River and the property’s abundant maple trees.

The home, built in 2004, “offers a landscape you wouldn’t get anywhere else in Quebec,” said Félix Giguère, partner and broker at Barnes International Realty Quebec in Montreal, and the listing agent. The estate also features a large artificial pond with a diving dock. “With the pond on one side and the river on the other, you see water from every room of the house.”

The seller, a Montreal-based building contractor, wanted the house “to reflect the immensity of the property,” Mr. Giguère said. Materials including cast-iron, cherry wood and stone were used “to capture the feel of the Laurentians.”

The Five-Bedroom, Three-Bath House Was Built In 2004 Using Materials Including Cast-Iron, Cherry Wood And Stone.
Barnes International Realty Quebec

A country road leads to the home’s wrought-iron gates, which open to an unpaved road leading to a wood bridge and a large garage structure.

Farther up the drive, the home’s front door opens to a great room whose ceilings soar as high as 20 feet. Long, symmetrical windows are “the main element of the house,” Mr. Giguère said. “Every room receives light all day long.”

The sculpted image of a pine tree embellishes a tall stone fireplace, and a door near the fireplace opens to the primary bedroom suite. A steel walkway floats overhead, stretching from the top of a staircase to a windowed seating area.

Cast-iron hardware complements gleaming cherry cabinets in the kitchen, where the sellers also commissioned local artisans to build an antique-style gas stove “in the method they used to build old Canadian ovens,” Mr. Giguère said. A four-season sunroom off the kitchen features a peaked ceiling.

Two more bedrooms and a bathroom are on the upper floor. The lower level has a family room, guest bedroom, office, laundry room and access to an attached one-car garage.

The estate’s acreage includes landscaped trails for hiking, cross-country skiing and snowmobiling, Mr. Giguère said. To tap their maple trees, the owners also built a “sugar shack” where they bottled their own maple syrup.

The tiny village of Val-des Lacs sits 18 miles northeast of the popular Mont Tremblant resort, with its shopping, services and small airport. Montreal is 75 miles southeast, and the Champlain, N.Y., border crossing into the United States is another 40 miles from there.

Barnes International Realty Quebec

The Laurentians region of Quebec (known as Laurentides to French speakers) is home to the Laurentian mountain range and is popular with second-home buyers. Like other such areas around the world, it has been “on fire” since the onset of the pandemic, said Steven Lafave, managing director of Engel & Völkers Tremblant in Mont Tremblant.

Lately, however, rising interest rates and other market-cooling measures have tamed activity “back to something more normal,” he said. Still, “the blurring of primary and secondary homes continues to fuel demand.” Single-family homes in desirable areas “near lakes and resorts” start around $1 million, he said, “but if you distance yourself a bit, you get twice the home for half the price.”

The local housing market is “disjointed,” said Liza Kaufman, founder of The Kaufman Group/Sotheby’s International Realty Quebec in Montreal, who focuses on luxury homes. “We’re seeing a significant slowdown at the lower end, but there are a lot more buyers with a lot more cash in the upper echelons. They are not affected by interest rates.” Ms. Kaufman said luxury homes in the Laurentians can sell from $2.5 million “to nearly $40 million for an estate.”

Properties also are “staying on the market longer,” said Christina Miller, founder of Christina Miller Real Estate Group in Montreal. “It’s still a favorable market for sellers, but without the bidding wars and multiple offers we saw through the pandemic.” With continuing demand for short-term accommodations, “investors are constantly calling about properties up north,” she said.

According to data on the Laurentians region from the Quebec Professional Association of Real Estate Brokers (QPAREB), the median sale price for a single-family home in August 2022 was $320,647 (440,000 Canadian dollars), an 11 percent increase from August 2021, and 20 percent below the median price for all of Quebec.

The median condominium price of $249,075 (342,500 Canadian dollars) during the same period represented a 12 percent year-over-year jump — though it was a slower pace of growth than during the previous year, when some Laurentians towns logged median price increases of up to 32 percent as pandemic moves fueled the market.

“The market is holding up quite well, even though sales are declining from last year,” said Charles Brant, director of market analysis for QPAREB. “And the slowdown is more moderate than other regions,” especially Montreal, where an October QPAREB report cited a “sharp decline in sales” and easing of prices.

Barnes International Realty Quebec

The Laurentians still offers relative value when compared with second-home markets in other provinces. In Muskoka, the popular “cottage country” town northeast of Toronto, benchmark home prices reached $566,422 (725,400 Canadian dollars) in August, according to the Canadian Real Estate Association. In Banff, the upscale resort area northwest of Calgary, the median home price was $662,183 (912,475 Canadian dollars), according to data site Zolo.

Local buyers continue to propel the market in the Laurentians, which remains “the number-one destination for upscale, wealthy Montrealers with secondary residences,” Mr. Giguère said.

Montrealers also have been primary investors in Airbnbs, taking advantage of a torrid short-term-rental market, Ms. Miller said, noting that some buyers have cashed out of Montreal’s overheated market to invest in country properties.

Buyers from Ontario, which abuts Quebec to the west and south, have also powered the market. “Prices in Ontario are much higher, and Quebec’s not that far away,” said Mr. Brant of QPAREB. For the first time on record, more Ontarians moved to Quebec than the reverse in 2022, according to Statistics Canada, with lower housing costs cited as a primary driver.

Americans from the northeast and Florida predominate among non-Canadian buyers, who make up “15 to 25 percent of our sales in the Laurentians,” Mr. Lafave said. “They’re taking advantage of a strong U.S. dollar, and they love the joie de vivre of Quebec culture.”

Mr. Giguère said that French, British, Chinese, and Middle Eastern buyers have also bought in the region.

Most international buyers prefer condominiums around Mont Tremblant, Ms. Kaufman said, especially since the 2017 purchase of the Mont-Tremblant resort by the parent company of Aspen’s Snowmass property. “They check out Tremblant because they know Aspen,” she said.

Barnes International Realty Quebec

At the moment, the only restriction on foreign buyers in Quebec involves properties zoned for agriculture, according to Richard Burgos, a partner at the Lavery law firm in Montreal.

Starting in 2023, however, the door will slam shut on most foreign buyers across Canada, the result of a wide-ranging federal budget package, passed in June, that will prohibit noncitizens from purchasing “houses, condos, townhouses and duplexes,” said Julie Côté, senior manager of the real estate taxation practice for nonresidents at the accounting firm FL Fuller Landau, in Montreal.

The two-year ban is intended to cool markets amid a persistent housing shortage. Foreigners “will be allowed to buy some multiunit properties, and possibly vacation properties located outside urban areas, but that’s not official yet,” Ms. Côté said.

A new anti-flipping tax will also take effect in January, intended “to prevent people from using the housing market as an investment scheme,” Ms. Côté said. Rather than a 50 percent tax on capital gains from a sale, she said, any buyer who sells within 12 months of buying will face taxes on 100 percent of net profits.

This year, the federal government also instituted a 1 percent so-called “underused tax” on foreigners whose residential property in Canada is not occupied or rented for at least six months out of the year.

Notaries handle closings in Quebec after agents for both parties finalize an accepted offer. Expanded Quebec language laws enacted in September require transfer documents and mortgage deeds to be in French, Mr. Burgos said. Documents related to offers are still available in English.

Barnes International Realty Quebec

French, English; Canadian dollar (1 Canadian dollar = $0.73)

Buyers in Quebec pay a progressive land transfer tax between 0.5 and 2 percent of the purchase price, Ms. Côté said, adding that notary fees generally range from $880 to $1,100 (1,200 to 1,500 Canadian dollars).

Broker commissions in Quebec range from 4 to 5 percent, Mr. Giguère said. Annual property taxes on this home total about $4,800 (6,528 Canadian dollars).

Félix Giguère, Barnes International Realty Quebec, 514-294-1141, barnes-quebec.com/en/

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