Lack of listings and experienced buyers on the market push prices to new highs in January

The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its residential real estate market statistics for the Montreal Census Metropolitan Area (CMA) for the month of January, based on the real estate brokers’ Centris provincial database. 

“The combination of the return of tighter health restrictions due to the Omicron wave, the expected upward movement in interest rates which are already seen in 5-year fixed mortgage rates, and the arrival of new opportunities at the start of the year has once again made the acquisition of a new property a priority for experienced buyers and investors” says Charles Brant, QPAREB Director of Market Analysis. “This renewed interest is particularly evident in the Island of Montreal’s peripheral areas. With rising sales in higher-price segments while down in others, we are noticing a further acceleration in prices, particularly on the North Shore, the South Shore, Vaudreuil-Soulanges and Saint-Jean-sur-Richelieu,” he points out. 

January highlights  

• Sales in Montreal (2,836) are down sharply for this time of year. You would have to go back to 2018 to find a lower level of sales.
• This decline contrasts with properties selling for over $700,000 which accounted for 22 per cent of the market in January 2022, 8 per cent greater than in 2021 and which is experiencing an 11 per cent increase in sales. This implies that first-time home buyers continue to be less active in the market, particularly in the periphery, which has also contributed to lower overall sales.
• The most significant decreases were recorded for several peripheral markets, notably Vaudreuil-Soulanges (-40 per cent), the North Shore (-33 per cent), and the South Shore (-30 per cent).
• The drop in sales is slightly less significant in Laval (-26 per cent), Saint-Jean-sur-Richelieu (-24 per cent) and on the Island of Montreal (-21 per cent). These sharp declines are primarily due to a shortage of properties coming to market and a particularly high level of activity at the same time of year in 2021.
• The slowdown in sales across the CMA was most significant for single-family homes (-32 per cent), small income properties (-23 per cent) and condominiums (-22 per cent).
• Active listings in the Montreal CMA continue to decline, although at a more moderate rate (-15 per cent), which is attributable to the approach of a floor.
• Several factors explain this new acceleration in prices:
  • Extreme market conditions, still to the advantage of sellers.
  • The effect of a greater share of properties selling in the higher price ranges.
  • A context in which overbidding is involved in one out of two sales in the peripheral areas of the Island of Montreal.
• The result is record median price increases and levels in January. Single-family homes reached $541,000 (+25 per cent) and condominiums reached $381,000 (+19 per cent). Prices for plexes also reached a new price record for this period of the year at $712,500 (+9 per cent). However, the percentage increase is not a record.

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