The Quebec residential real estate market reached record numbers in 2017, and is expected to top that level by the end of 2018 with the Centris system exceeding 86,000 transactions, according to the Quebec Federation of Real Estate Boards (QFREB). All census metropolitan areas (CMAs) in Quebec except Trois-Rivières are expected to post growth in the number of home sales completed this year.
“With a five per cent increase in sales, Quebec is performing well in the residential real estate market compared to other provinces,” said Paul Cardinal, QFREB’s market analysis manager, in a press release. “Western Canada is experiencing a significant decline in activity, particularly in British Columbia, with a 23 per cent drop to date in 2018. Ontario sales are down too, with an 18 per cent decrease. As for property prices, Quebec is turning in the best performance with a five per cent increase, all categories combined.”
The Montreal and Gatineau CMAs are experiencing a seller’s market, while conditions favour buyers in the Quebec City, Sherbrooke and Saguenay CMAs. In Trois-Rivières, home to the most affordable properties in the province, the market is balanced.
Meanwhile, Montreal’s real estate market continues to outperform the rest of Quebec. In addition to logging record sales in 2018, time to sale is declining sharply, prices are climbing steadily and bidding above list price has become common in some regions. Condominiums are seeing the highest number of total sales, but “plexes” are recording the best price growth.
“Abundant condominium construction in recent years has not lowered prices as some observers feared,” said Cardinal. “Demand has held strong in the resale market, as reflected by the 15 per cent increase in sales in this segment to date in 2018.”
However, the suburbs – particularly the South Shore and the Laval region – are seeing increases of 12 per cent and seven per cent, respectively, to date in 2018, compared to last year. The North Shore, meanwhile, has topped even the Island of Montreal, logging a four per cent increase in sales so far this year.
Buyers bidding over list price is common across all property categories, but particularly in plexes, as 17 per cent of plex sales closed at higher than list price. Overbidding is most often seen in Outremont, Rosemont-La Petite-Patrie, Plateau-Mont-Royal, the Southwest and the West Island.
For 2019, a strong labour market, rising disposable income and high consumer confidence are expected to boost home sales next year. The QFREB predicts 2019 will start with a flurry of activity, which will gradually slow in the second half of the year due to rising borrowing costs. The five-year mortgage rates posted by major financial institutions are expected to climb, adding half a percentage point to reach about six per cent by year-end.
The QFREB expects the number of transactions next year will rise one per cent to a new record of 87,650 sales. The average price of a single-family home is forecast to climb three per cent to $257,000.
The QFREB expects Montreal’s residential real estate market to perform slightly better than the rest of the province overall next year, due in part to steadier population growth with the increase of net migration.
As a result, the number of transactions in the Montreal CMA are expected to climb to 47,600 in 2019. Price growth is also expected to be more stable than elsewhere in the province. The QFREB predicts a four per cent increase in the average price of a single-family home, to $332,000. For condominium units, which has seen a tightening of market conditions over the past year, the average price is forecast to climb three per cent to reach $263,000.