Montreal Real Estate Forecast: Sales Slow, Inventory Swells, Expectations Grow
A winter chill has descended on the Montreal real estate market, according to new figures compiled by the Quebec Professional Association of Real Estate Brokers (QPAREB).
In the Montreal area, transactions were down 36 percent from last year, marking the slowest pace of activity since the financial crisis of 2009. Many potential buyers seem to be waiting on the sidelines, according to the organization’s market analysis director Charles Bryant. Rising rates have spooked some buyers, but slow sales are also having the effect of building up inventory. Once buyer confidence returns, there will be more than enough inventory to handle the rush, says Bryant.
“With the impact of rising interest rates on the financial capacity of first-time homebuyers, many are taking a cautious wait-and-see attitude despite the drop in prices. Nevertheless, the latent demand to buy a property is still very present,” he noted in a press release from the organization.
The QPAREB report chronicled a slowing of sales across the region. The biggest declines were in Laval and the Island of Montreal, while the South Shore showed a decline in line with the overall average. Least affected were Vaudreuil-Soulanges, the North Shore of Montreal and Saint-Jean-sur-Richelieu.
The slowdown was just as widespread in housing categories, with some variations on a familiar theme: Single family homes had the least severe decline, and duplexes the most, down by more than half. Condominium sales fell 38 percent to a level not seen since 2017.
Bucking the trend was the figure for the number of active listings across the region. It rose 65 percent year-over-year in January. The biggest buildup in inventory is occuring in the single family home category.
As sales slowed and inventory rose, prices declined. The average condominium in Montreal is selling for $370,000, down just 3 percent from the same period last year. The median price for a single family home in the metro area now stands at an even $500,000, down 7 percent from January of 2022.
In the city itself, the biggest price drops for single family homes were in Saint-Jean-sur-Richelieu and the South Shore of Montreal. The smallest declines were recorded in the North Shore of Montreal, Vaudreuil-Soulanges and Laval. The Island of Montreal showed a decrease that was typical of the metro average.
Although far from robust, the figures are relatively moderate in many categories, indicating a strong rebound is possible once the Bank of Canada ends its current tightening strategy, which has made mortgages significantly more expensive for buyers.
This turnaround could happen sooner than some analysts thought possible as recently as several months ago. The reason: BOC governors have been hinting that the end is near — not for Montreal real estate, but for the dramatic escalation that has put the dream of home ownership out of reach for so many families.
