The impacts of rising interest rates are being felt in the real estate market in Quebec, where a drop in sales and prices was recorded in the third quarter of 2022, according to data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ).
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Data released Thursday show that the number of sales fell by 18% compared to the third quarter in 2021. Thus, 18,146 transactions took place during the third quarter of 2022. According to the APCIQ, this figure is lower than the average of pre-pandemic transactions for a third quarter, since the trough of activity in 2021 (19,400).
“The third quarter is the one that confirms a rapid change of direction. […] The large consecutive increases in the key interest rate recorded from March to September, of a magnitude comparable to those observed in the early 1990s, halted the frenzied momentum of the first quarter, still palpable in the second quarter”, underlined by press release Charles Brant, director of the APCIQ’s market analysis department.
Between July and September, real estate prices also fell. The median price of single-family homes thus fell by 10%, from $448,694 in the second quarter of 2022 to $400,000 in the third quarter.
Condominiums also saw a significant drop in the median price on a consecutive basis, going from $381,000 in the second quarter of 2022 to $359,000 in the third quarter, a decrease of $22,000.
For Mr. Brant, these data reveal “a strong attenuation of the overheating situations which prevailed, until now, in several regions of the south of the province”. He also pointed to the increase in the number of months required to sell the inventory of properties on the market and the simultaneous drop in sales concluded following an overbidding process.
The Montréal CMA records the largest drop
The Montreal Metropolitan Region (CMA) recorded the largest decline in the third quarter of 2022 (-23%), followed by the Gatineau CMA (-19%), according to APCIQ data.
Contrary to the first and second quarters, sales outside Quebec metropolitan areas experienced a less significant decline than the provincial average in the third quarter (3,503 transactions).
In a context of transactional slowdown, only two localities recorded an increase in residential sales: Mont-Laurier (+21%) and Sept-Îles (+5%). Conversely, Mont-Tremblant experienced a very significant decline (-40%), followed by Rivière-du-Loup (-31%), Charlevoix (-31%) and Cowansville (-30%)
The APCIQ also noted that active listings stood at 29,166 in the third quarter of 2022, a jump of 19% compared to the third quarter of 2021 and the first increase, all quarters combined, since 2015.