The Bank of Canada’s recent interest rate pause did not have the expected impact on real estate, particularly in the Montreal market, where residential sales slowed last October.
At least that is what Charles Brant, director of the market analysis department of the Professional Association of Real Estate Agents of Quebec (APCIQ), observed.
“The combination of several negative factors is helping to revive a sense of caution and favoring the postponement of purchase plans,” he explained. “We must emphasize the uncertainties created by the rapid slowdown in the economy and the greater difficulty in building or maintaining sufficient levels of savings to cover all eventualities.”
A total of 2,675 residential properties were sold in the Greater Montreal area in October 2023, a decrease of 2% compared to the same month in 2022. However, this is the second lowest level of activity recorded for this period of the year.
Property purchases fell in the North Shore areas of Montreal (-12%), Laval (-17%), Vaudreuil-Soulanges (-19%) and Saint-Jean-sur-Richelieu (-30%). In contrast, the island of Montreal (+7%) and the south coast (+8%) remain attractive.
Single-family homes experienced slightly more neglect compared to last year (-6%), while sales of low-income properties increased by 10%. Condominium sales remained stable.
In general, all average prices increased in October compared to the same month in 2022. Single-family homes recorded a price of $545,000 (+7%), complexes of $735,000 (+5%) and condos of $390,000 ( +3%).
Resistance in Quebec
Once again, Quebec’s real estate market is weathering the storms by managing to maintain strong activity.
“The Quebec market continues to impress with its resilience to the rain of bad news nationally. This resilience is based on the robustness of the region’s economy, but also on the level of property prices,” emphasized Mr. Brant.
Residential property sales rose 14% between October 2022 and 2023, with 729 transactions recorded last month.
The Quebec agglomeration (+16%) and the northern periphery (+23%) recorded good sales growth, while the south coast of Quebec recorded a decline of 2%.
Low-income properties were particularly popular, seeing a 42% jump in sales, compared to a 30% increase for condos and a 4% increase for single-family homes.
The median price remained stable in October at $350,000 for single-family homes (+1%) and $249,000 for condos (+4%). The average price for Plexus fell 9% to $249,000.
“The situation could change if prices continue to rise at the same pace in the coming months. “As in any market experiencing an imbalance between supply and demand, the continued rise in prices is attracting investors despite higher interest rates,” Mr Brant warned.