The year 2024 is likely to be marked by a return of demand from property buyers in the Greater Montreal area, which is likely to lead to an increase in property prices given the housing shortage.
• Also read: Real estate market: Significantly fewer first-time buyers in 2023
This is according to the results of the Royal LePage Home Price Study and Market Forecasts published on Monday.
With many Quebecers having forgone buying a home in 2023, there is a risk that the real estate market this year will be marked by “a return of pent-up demand among buyers.”
However, this increase in demand risks “stimulating prices upward” given the province’s housing shortage, which the Canadian Mortgage and Housing Corporation (CMHC) calculates will see a deficit of 860,000 to nearly 1.09 by 2030 has millions of residential units.
Real estate transactions are therefore likely to slow at the beginning of 2024, before a strong resumption of activity towards the end of spring due to the expected decline in borrowing costs, believes Dominic St-Pierre, vice-president and general manager of Royal LePage, Quebec Region.
In 2023 prices are already higher
In 2023, real estate prices in the Greater Montreal area, excluding Laval, were 4.1% higher than in 2022, despite the economic slowdown caused to combat inflation, Royal LePage noted.
However, on a quarterly basis, all sectors except the South Shore experienced a decline in property prices (-1.5%), driven particularly by higher mortgage rates, impacting the purchasing power of potential buyers.
“Despite this, we are seeing an increase in requests for property viewings, reflecting buyers’ renewed optimism about the property market, while a reduction in interest rates looks increasingly tangible for 2024,” Mr St-Pierre explained.
In terms of property type, the average price of a single-family home increased 4.7% to $629,700 compared to the fourth quarter of 2022, a decrease of 2.5%.
The median condo price remained stable in the fourth quarter of 2023, recording an increase of 1.1% compared to the same period in 2022.
“The Bank of Canada's campaign to reduce inflation has proven to be very effective,” said Mr. St-Pierre, recalling that inflation had reached a rate of 8.1% in June 2022.
The number of active registrations across all property types remained well below the average of the last ten years despite sharply increasing demand due to rapid population growth.
“Although consumers have adapted to the new reality of higher mortgage rates, with housing supply remaining extremely low, this is the main factor currently preventing house prices from rising,” Mr St-Pierre said.
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Highlights of the real estate market in 2023
• The total price of a property in the Greater Montreal area reached $566,700 in 2023.
• 30,171 residential registrations in the metropolitan region in December 2023.
• All regional markets except Sherbrooke are experiencing an increase in property prices.
• The Quebec and Trois-Rivières markets are the only ones that did not experience a quarterly decline in house prices in 2023.