The COVID-19 pandemic is predicted to push buyers and sellers in Montreal’s residential market to the sidelines for now, rather than throw the market into turmoil.
According to recent statistics from The Quebec Professional Association of Real Estate Brokers (QPAREB), the crisis slowed down the market during the second half of March, however, the first half of the month was one of the busiest on record.
“In Quebec, Montreal is the CMA that is most affected by the spread of the virus, due to the city’s greater exposure to international trade and the size and density of its population,” explained Charles Brant, director of the QPAREB’s market analysis department. “As a result, this market is exposed to psychological stress caused by stricter distancing measures and greater economic uncertainty. These factors help explain the faster and more pronounced drop in transactions compared to other regions, notably that of Quebec City.”
The high level of activity in March was due to the conclusion of transactions initiated earlier in the year. The real estate market was also boosted by three consecutive drops in interest rates (-150 basis points) in March, bringing rates to levels that are comparable to those seen in 2008 during the last financial crisis.
“In contrast to what we’ve been seeing since the start of the year, April and May are expected to be among the least active months recorded for a spring season since the start of the millennium,” added Mr. Brant. “In a context where uncertainty about the economic outcome of this crisis is very high, we can expect buyers and sellers to remain on the sidelines. However, far from being in a downturn situation, the market will, rather, be on pause.”
There were 5,907 residential sales transactions in March 2020, a four per cent increase compared to March of last year. Still, this was the 61st consecutive month of sales growth. For Q1, 14,662 transactions were concluded in the Montreal CMA, a 13 per cent increase compared to the first quarter of 2019.