The rise in interest rates over the last 12 months has severely limited the borrowing ability of buyers looking to purchase a property.
• Also read: Mortgage extension in 2024: Will homeowners benefit?
• Also read: Real estate market: what can we expect in 2024?
Knowing that approximately 28% of mortgages in La Belle Province are up for renewal within the next 18 months, we could see a lot of movement in the real estate market.
“We’ve been seeing it for two or three months,” says broker Pierre-Olivier Vear. For the last two years we have been in an artificial bubble. The rise in interest rates had no direct impact on sellers.
“On the other hand, the phone is ringing more and more often with people who have a mortgage extension. They can no longer do it and have to sell their property to buy cheaper ones.”
According to Pierre-Olivier Vear, financial institutions are not keeping their customers informed. The economic context tends to push them to go into solution mode.
“They’re still helping people. They will try to remedy the situation. There weren't many cases of people being forced to sell. We’re starting to see it.”
Stevens LeBlanc/JOURNAL DE QUEBEC
Ironically, it's not the owners of homes priced at $750,000 or more who are swimming in difficult waters: “People in the $450,000 to $600,000 range are finding themselves forced to sell their homes. By selling, they buy back cheaper ones.”
If we are currently seeing a seller's market, it would be surprising if the trend reversed.
“I wouldn’t believe that,” believes Vear. I think we remain in a seller's market. There is a real shortage of inventory in Quebec at the moment. The increase in tariffs means that everyone stays at home.”
On the other hand, in the Capitale-Nationale region there are currently bidding wars between developers who have their sights set on houses.
This does not mean that significant price reductions can be expected.
“In 2023 we expected an impact on prices, but they remained stable. The broker warns that they have even increased somewhat.”
“If prices come down in 2024, that will create excitement and there will be more buyers.”