A slowdown in sales has been registered in each of the major areas of the Québec CMA, with sales declines ranging from 15 per cent to more than 30 per cent in different regions across the province. This precarious situation in the overall real estate market requires an analysis to understand the factors at play and the future prospects for improvement.
The northern outskirts of Quebec City and the south shore of Quebec City were particularly affected by the drop in home sales during the month of March. In the northern periphery, the number of sales dropped from 136 to 100 (-26 per cent), and on the South Shore, it fell from 197 to 147 (-25 per cent). The Québec City agglomeration registered a 16 per cent decrease, from 721 to 618 sales. Although it was still lower than the ideal situation, this decrease was much less pronounced than in neighbouring areas.
In the Montréal area, real estate transactions plunged by 25 per cent. In March, 3,947 transactions were carried out in the metropolis, a decrease of 28% compared to the same month in 2022 (APCIQ, 2023).
All property categories experienced a decline in transactional activity, ranging from 15% to 35%. The small income property category particularly stood out with a high decline of 35%, with 66 sales for this period. For condominiums, the decline was more moderate: -23%, with a total of 280 transactions completed. Finally, single-family homes experienced the smallest change of all categories, with a reduction in sales of only 15 per cent, or 568 completed transactions compared to the same period last year.
In the space of less than a year, the Bank of Canada has raised the policy rate eight times. Currently the rate is at 4.5%, which is a significant increase from its level a year ago, which was only 0.25%.
However, the last increase, of 0.25% basis, was on January 25. This shows that the Bank of Canada is keeping the policy rate at the same level, and is pursuing quantitative tightening.
This beginning of stabilization suggests that the Canadian economy is recovering and regaining its financial stability. Investors are advised to watch this development carefully.
The benefit of working with an expert
The year 2023 has its share of challenges and the real estate market is no exception.
After several years of a booming market, the tide is turning. A drop in sales in the greater metropolitan area, a drop in residential property prices, the end of overbidding, or not? Is it a good time to buy? Or to sell? Many questions that require a superior knowledge of each market segment.
More than ever, being accompanied by an experienced broker who knows the field is an added value.
Would you like to have your property evaluated by a REALTA real estate broker?