While the drop in real estate sales continues in the Montréal Metropolitan Area, prices continue to rise for the month of March.
Significant drop
The drop-in real estate activity continues through the month of March, still limited by a low number of active listings on the market.
In fact, there were a total of 5493 residential transactions concluded in the Montréal Metropolitan Area, which represents a 13 per cent drop compared to the same period in 2021.
The new increase in the key interest rate expected on April 13 should help calm things down a bit. More homeowners could put their property on the market to take advantage of a still very favourable market situation. However, in a context of rising rates combined with prices that are reaching new heights, the pool of potential buyers is shrinking.
Price increase
The month of March was marked by another vigorous increase in prices. Despite a 19 per cent decrease in single-family home transactions, the average price is up by 7 per cent, and condominiums on the Island of Montréal fared even better with an 11 per cent decrease in the number of transactions and a 10 per cent increase in the average price. This new feverish surge, against a backdrop of overbidding, could be one of the very last.
The factors contributing to upward pressure on prices remained present in the Montréal metropolitan area market, despite the beginning of an upward cycle in the key interest rate:
- Continued tight market conditions, with a substantial advantage for sellers
- A competitive environment for buyers, with overbidding still affecting more than half of all transactions
Market conditions in all sectors and for all types of properties remain in favour of sellers. The ratio of sellers to buyers is always about 3 sellers to 1 buyer. Note that a balanced market is about 9 sellers for every buyer. This implies that with the current unbalanced market, property prices will continue to rise for the next few months and by a significant amount.
The major question
Is it time to sell? More than ever. The effect of interest rate increases combined with rising prices will eventually affect the strength of the market.
If you want to know more, don’t hesitate to contact us.
At REALTA, real estate is a matter of values.
