Québec housing prices regaining ground, erasing part of the losses recorded since summer 2022

Market conditions continue to favour sellers despite the trend towards a more balanced market, especially in markets where price levels are pushing out first-time homebuyers.

The Québec Professional Association of Real Estate Brokers (QPAREB) recently published its quarterly report on the residential real estate market using data from the Centris provincial database.

According to the report, there were 23,550 residential sales across the province in the second quarter of 2023. This represents a 13 per cent decrease compared to the same quarter in 2022. The current level of sales activity is similar to what was observed in 2015 during this period of the year.

“The magnitude of the rise in interest rates is reflected in an acceleration in the drop of sales from the 2022 third quarter to the 2023 first quarter. However, there was a less pronounced decline in sales in the second quarter of 2023. In a seasonal context conducive to purchasing a home, buyers have indeed returned in greater numbers, encouraged by the stabilization of interest rates and property prices, all as negotiation conditions continue to normalize. Although it is too early to speak of a general market recovery, this lessening of the drop in sales at least portends a stabilization of sales for the next few months, including for markets with some of the highest property prices in the province,” said Charles Brant, QPAREB market analysis director.

“This encouraging return of buyers was, however, limited by several factors that will continue to characterize the market,” warns Brant. “First, by a chronic lack of inventory of properties for sale across most provincial markets. Next, by the continued pressure on prices fuelled by a persistent high latent demand, particularly in CMAs and certain urban areas exposed to more sustained migratory flows. Finally, by the maintenance of mortgage interest rates at their current levels, if not even higher, thus depriving a larger and larger share of the pool of first-time homebuyers of the opportunity to purchase a property. That being said, a few markets continue to offer buying opportunities at competitive prices, thus finding themselves better positioned to ride out the up cycle in interest rates without a decline in activity or a further price correction.”

Quarterly highlights for the province include the following.

In terms of sales, the pace of transactional activity continued to slow down in all three property categories, with variations ranging from -8 per cent to -30 per cent. Notably, small income properties experienced a significant decline of -30 per cent with 2,010 transactions. Condominium sales followed with a drop of -16 per cent, accounting for 6,060 sales. Single-family homes, with 15,405 transactions, recorded a more modest decline of -8 per cent.

In a majority of metropolitan areas, there was a decrease in sales during the 2023 second quarter. The greatest declines were observed in the Gatineau and Montréal CMAs at -17 per cent and -15 per cent, respectively. Following closely were the CMAs of Sherbrooke (-13 per cent), Drummondville (-11 per cent), and Québec City (-7 per cent). However, sales remained stable in the Trois-Rivières CMA (-1 per cent), and the Saguenay CMA saw an increase of 5 per cent.

Some urban localities experienced a sharper drop in sales between the second quarters of 2022 and 2023. Cowansville and Rawdon posted the greatest declines at -34 per cent and -33 per cent, respectively. Other markets, including Rivière-du-Loup (-26 per cent), Shawinigan (-25 per cent), Sept-Îles (-25 per cent), and Lachute (-25 per cent), also recorded significant drops.

However, some small urban centres saw an increase in sales compared to the previous year. Notable examples include Amos (43 per cent) and Val-d’Or (27 per cent), followed by Rimouski (15 per cent), Saint-Sauveur (12 per cent), Mont-Laurier (11 per cent), and Baie-Comeau (9 per cent). Thetford Mines (6 per cent) and Matane (2 per cent) also recorded modest increases.

While at a slower pace, properties available for sale on the province’s market continued to accumulate during the 2023 second quarter. The number of active listings reached 32,134 across Québec, indicating a 36 per cent increase compared to the same period in 2022.

Across Québec, the median price of single-family homes was $430,000, marking a decrease of -4 per cent from the 2022 second quarter but still representing an 8 per cent increase compared to the 2023 first quarter. For condominiums, the median price was $369,000, showing a decline of -3 per cent compared to the same period last year, yet a 6 per cent increase compared to the previous quarter. Smaller income properties saw a different trend, experiencing an increase of 2 per cent in median price compared to the 2022 second quarter, reaching $550,000 in the 2023 second quarter.

Despite the market’s lack of dynamism, the number of months needed to sell the inventory of residential properties on the market remained at a level that favored sellers across the province. The decline in transactional activity is reflected, in particular, by an increase in active listings, leading to the number of months needed to sell the inventory rising to 4.8 months (all categories combined).

In the Québec single-family home market, the average selling time was 52 days in the 2023 second quarter, indicating an increase of 17 days compared to the same period in 2022. Condominiums and small income properties followed with respective selling times of 54 days and 77 days, representing 19 days longer for condominiums and 24 days longer for small income properties.

Residential sales in the Montréal CMA stood at 11,795 in the 2023 second quarter, experiencing a 15 per cent drop compared to the same period last year. This level of sales is similar to that observed in 2014 for this period of the year. Active listings for the Montréal CMA increased by 44 per cent compared to the same quarter last year, driven by listings of single-family homes (53 per cent), condominiums (41 per cent), and small income properties (28 per cent).

The Québec City CMA recorded 2,440 residential sales in the 2023 second quarter, representing a decrease of -7 per cent compared to the same period in 2022. This level of sales for a second quarter is above the historic average. Active listings for the Québec City CMA increased by 23 per cent compared to the same quarter last year, with single-family homes and condominiums seeing increases of 38 per cent and 12 per cent, respectively, while plexes experienced a decline of -9 per cent.

The Gatineau CMA experienced a further decline in sales in the 2023 second quarter, with a -17 per cent drop compared to the same period a year ago. Residential sales in the Sherbrooke CMA stood at 509 in the 2023 second quarter, representing a decrease of -13 per cent compared to the same period last year.

During the 2023 second quarter, the Trois-Rivières CMA recorded 420 residential sales, representing a slight decrease of 5 transactions (-1 per cent) compared to the same period in 2022. Despite this minor decline, the level of activity still brings sales close to a record level for a second quarter.

In the Saguenay CMA, 419 residential sales were posted during the 2023 second quarter, indicating an increase of 5 per cent compared to the same period in 2022. However, this level of sales for a second quarter is slightly lower than the historic average.

The Drummondville CMA recorded 220 residential sales during the 2023 second quarter, representing a decrease of 28 transactions (-11 per cent) compared to the same period in 2022. However, it is worth noting that this level of sales for a second quarter remains above the historic average.

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