2024-01-15 08:30:00
The year 2024 should be marked by a return of demand from property buyers in greater Montreal, which should increase property prices in a context marked by the housing shortage.
• Read also: Real estate market: much fewer first buyers in 2023
This is according to the results of the Royal LePage Home Price Study and Market Forecasts released Monday.
Since many Quebecers have refrained from purchasing a property in 2023, the real estate market risks being marked by “a return of pent-up demand among buyers” this year.
This increase in demand, however, risks “stimulating prices upwards”, in a context of housing shortage in the province, which has a deficit of 860,000 to nearly 1.09 million housing units by 2030, according to Canadian Mortgage and Housing Corporation (CMHC) calculations.
Real estate transactions should therefore slow down at the start of 2024, before experiencing a strong resumption of activity towards the end of spring during the anticipated drop in borrowing costs, believes Dominic St-Pierre, vice-president and director General, Royal LePage, Quebec region.
Prices already higher in 2023
In 2023, property prices in greater Montreal, excluding Laval, were 4.1% higher than those in 2022, despite the economic slowdown caused to counter inflation, noted Royal LePage.
On a quarterly basis, all sectors except the South Shore, however, experienced a decline in property prices (-1.5%), due in particular to higher mortgage rates, affecting the purchasing power of potential buyers.
“Despite this, we are seeing an increase in requests for property viewings, reflecting renewed optimism among buyers towards the property market, while a reduction in interest rates seems increasingly within reach. for 2024,” explained Mr. St-Pierre.
Regarding property type, the median price of a single-family detached home increased by 4.7% compared to the fourth quarter of 2022 to reach $629,700, a decrease of 2.5%.
The median price of condominiums remained stable in the fourth quarter of 2023, recording an increase of 1.1% compared to the same period in 2022.
“The Bank of Canada’s campaign to reduce inflation has proven to be very effective,” said Mr. St-Pierre, recalling that inflation had reached a rate of 8.1% in June 2022.
The number of active registrations, all types of property combined, remained well below the average of the last ten years, despite strong growth in demand due to rapid population growth.
“Even though consumers have adapted to the new reality of higher mortgage rates, this is the main factor currently holding back an escalation in property prices, given the housing supply which remains extremely low,” said specified Mr. St-Pierre.
Highlights of the real estate market in 2023
• The aggregate price of a property in greater Montreal reached $566,700 in 2023.
• 30,171 residential registrations in force in the metropolitan area as of December 2023.
• An increase in property prices recorded in all regional markets except Sherbrooke.
• The Quebec and Trois-Rivières markets are the only ones to have experienced no quarterly drop in property prices during 2023.
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