Real estate: “risk of drift” on the rise in Montreal, according to brokers

Real estate: “risk of drift” on the rise in Montreal, according to brokers
Real estate: “risk of drift” on the rise in Montreal, according to brokers

The warning was issued on Wednesday, after the Association released its statistics for the month of March – compiled through the Centris provincial database of real estate brokers – during which market conditions continued to be strongly to the advantage of sellers even if the economic outlook remained still uncertain.

“Extremely sharp” increases

Thus, the median price of a single-family home jumped 32% last month, compared to the corresponding period of 2020, to settle at $ 481,000 in the region comprising the island of Montreal, its suburbs, Laval , Vaudreuil-Soulanges and Saint-Jean-sur-Richelieu. Province-wide, the increase was 27% in March, for a median price of $ 355,000.

There are extremely sharp price increases, observed the director of the market analysis department at the APCIQ, Charles Brant, during a telephone interview. It may be an irrational market given the context. Teleworking pushes people out of cities.

The health restrictions imposed due to the COVID-19 pandemic have prompted many to want to move away from large centers and acquire more property since working from home is now part of their daily life. Some households have bought properties at prices that are really higher than their real value, even if they are far from services and major highways, pointed out Mr. Brant.

In the longer term, with a normalization of the market, these properties could be more at risk of correction, he estimated, without however offering a horizon.

The APCIQ also noted that the values ​​had remained very high for condominiums and plexes of two to five apartments, the prices of which were respectively $ 347,065 (+ 21%) in the Montreal region and its surroundings.

Residential sales grew 8% to 6,348 units in the Montreal metropolitan area, which is a remarkable performance in a context where transactions for single-family homes contracted by 7%.

In Quebec City, the median price of a single-family home has increased never recorded 19% in March to stand at $ 317,567, in a context where a record fall effective listings has been observed. Driven by condominiums and plexes with two to five apartments, the number of transactions jumped 18% to 1,339 sales.

The warningAPCIQQuebec Professional Association of Real Estate Brokers shortly after the announcement of the Canada Mortgage and Housing Corporation (SCHLCanada Mortgage and Housing Corporation) of March 25 that the degree of market vulnerability remained moderate in Montreal while recognizing that there were strong price increases. Elsewhere in the country, the level rose to Student for the Toronto, Ottawa, Hamilton, Halifax and Moncton markets.

We can say that there is a kind of catching up in the Quebec real estate market, said Mr. Brant. We believe that the market could still self-regulate in Quebec, in particular with the increase in fixed mortgage rates over five years.

Asked whether the authorities should nevertheless start taking action to avoid situations observed elsewhere in the country, the director of the market analysis service at theAPCIQQuebec Professional Association of Real Estate Brokers replied that he could there are actions to take to curb the speculative behavior.

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