Montreal’s Downward Trend in Sales Coming to an End as Prices Regain Strength
Transaction activity stabilizes with the arrival of spring, after hitting a six-month all-time low.
The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its residential real estate market statistics for the month of March 2023. The most recent market statistics for the Montreal Census Metropolitan Area (CMA) are based on the real estate brokers’ Centris provincial database.
Residential sales in the Montreal CMA totalled 3,947 in March 2023. The 28 per cent drop when compared to the same period last year pushes sales down to a new low for a month of March. Although sales are still down, it should be noted that this is the first month, since September 2022, with a decline below the -30 per cent mark.
“Following a period of unprecedented overheating, the Montreal CMA market was one of the first to react negatively to the rapid rise in interest rates that began a year ago. Currently, it is one of the first to react positively to the stabilization of interest rates, as is the case for several other major Canadian markets,” notes Charles Brant, QPAREB Market Analysis Director. “Although the economic uncertainties are far from over, households, like investors, are increasingly confident and inclined to carry out their intention to purchase a home in a context of stabilized financing conditions. Even though sales are still down, the slowing of this decline is a positive sign that the market is stabilizing. Another positive factor, the probability of a significant price correction is lower than a few months ago. This is particularly the case for fairly priced ‘turnkey’ properties for sale, which are still few on the market. It should also be noted that market conditions are still favourable to sellers despite transactional activity which has slowed considerably.”
- Almost all main metropolitan areas of the Montreal CMA are showing a slowdown in residential property sales. The Island of Montreal, with 1,366 transactions, recorded a 36 per cent drop in sales. This is the largest decrease in the territory of the CMA. The North Shore of Montreal (973 sales), the South Shore of Montreal (894 sales), Vaudreuil-Soulanges (202 sales) and Laval (389 sales) experienced respective declines of 28 per cent, 22 per cent, 20 per cent and 17 per cent. It is only in Saint-Jean-sur-Richelieu that the 123 residential sales recorded represent a slight increase of 3 per cent compared to the same period last year.
- The decline in sales occurs for each of the three categories of residential properties. Small income properties registered the largest decline with 302 sales (-42 per cent). Single-family homes posted a decrease of 21 per cent, with 2,083 transactions being concluded. Finally, with a total of 1,559 sales, the condominium category is down 33 per cent compared to the same period last year.
- An increase in active listings for all property types is noted, although the variation is down compared to recent months. A total of 16,754 listings were recorded in the Montreal CMA in March. This is a 62 per cent increase over last year. Single-family homes were mainly responsible for the rise in listings (78 per cent). Condominiums and plexes recorded respective increases of 54 per cent and 43 per cent.
- The slowdown in transactional activity also resulted in longer average selling times. The average selling time for small income properties was 76 days, up 24 days from the same period a year ago. Condominiums and single-family homes follow at 58 days and 53 days, respectively. This is 21 days longer for condominiums and 26 days longer for single-family homes.
- Median prices are still down when compared to those in March 2022. The median price of plexes reached $711,000 in March, a decrease of 8 per cent. Single-family homes traded at a median price of $535,000, a decrease of 5 per cent compared to last year. With a median price of $381,500, condominiums also recorded a 5 per cent decline for the period. Keep in mind that these values are compared to prices that were close to their all-time high at the same period last year.
- However, on a monthly basis, median prices are clearly showing signs of recovery. While condominiums and plexes are experiencing a slightly positive variation, single-family homes stand out with a median price increase of $20,000, an increase of 4 per cent over the previous month.
- Median prices for single-family homes are generally down in the major Montreal metropolitan areas. Recall, however, that they had peaked in April 2022. The decline is thus more marked in Laval (-8 per cent), the Island of Montreal (-7 per cent) and the South Shore of Montreal (-7 per cent). The drop in the median price is more modest in the North Shore of Montreal (-3 per cent), Vaudreuil-Soulanges (-2 per cent) and Saint-Jean-sur-Richelieu (-2 per cent).