Soaring Prices Weaken Residential Sales in Montreal’s Suburbs
The Quebec Professional Association of Real Estate Brokers (QPAREB) released its residential real estate market statistics for the Montreal Census Metropolitan Area (CMA) for the month of June, based on the real estate brokers’ Centris provincial database.
“Residential sales in the Montreal area fell significantly in June, mainly due to a historic shortage of single-family homes available for sale and a sharp increase in prices that also extended to the condominium segment. You may remember that in June 2020, it was primarily single-family homes on the periphery of the Island of Montreal that benefited from the strong rebound in sales following the confinement measures triggered by the first wave of the pandemic,” said Charles Brant, director of the QPAREB’s Market Analysis Department. “We must also take into account the potential impact on sales caused by the easing of some of the effects of the health crisis and the introduction of a new federal measure aimed at calming the real estate market by limiting buyers’ borrowing capacity somewhat. This measure came into effect on June 1,” he added.
- The situation of real estate market overheating1 is still significant, and more than half of all sales transactions in the Montreal CMA were concluded at a price that was above the asking price. The median price of single-family homes stood at $508,000 (+29 per cent), while that of condominiums reached $365,000 (+20 per cent) and that of plexes $703,000 (+16 per cent).
- In total, there were 4,619 residential sales transactions registered on the real estate brokers’ Centris system in June in the Montreal CMA, a 7 per cent decrease compared to June of last year. This confirms a downward trend in sales that has been evident since early spring.
- Sales on the Island of Montreal jumped by 11 per cent compared to June of last year. This strong increase is primarily attributable to condominiums, which have continued an upward trend since the start of 2021.
- Sales decreased in all of the peripheral areas, mainly due to a drop in single-family home transactions: Vaudreuil-Soulanges (- 28 per cent), Saint-Jean-sur-Richelieu (-25 per cent), the North Shore (-20 per cent), the South Shore (-11 per cent) and Laval (-8 per cent).
- By property category, sales of single-family homes across the Montreal CMA fell by 18 per cent (2,300 transactions) compared to June of last year. In contrast, a new sales record was set for condominiums, with 1,764 transactions, a 3 per cent increase year-over-year, which is consistent with the trend at the start of the year. The same was true for small income properties (plexes) as sales jumped by 28 per cent with a record-setting 552 sales.
- The increase in the supply of plexes on the market (+29 per cent) is in contrast to the decrease in supply that was seen for single-family homes (-37 per cent) and condominiums (-4 per cent).
1 Overheating occurs when, over a given period and in a given market, the ratio of the number of properties sold to the number of new properties put on the market is greater than 70%, meaning, when there are more than 7 properties sold for every 10 new listings.