A slowdown in home sales continued to emerge in Montreal last month, with sales down 9 per cent from the same month last year, the Association professionnelle des courtiers immobiliers du Québec (APCIQ) said on Friday. .
A total of 4,874 sales were recorded in the metropolitan area for the month of May, down from 5,354 transactions in May 2021, the group said. The slowdown in sales was most evident in the plex category, which is two- to five-unit buildings such as duplexes and triplexes. Their sales fell by 15% over one year. Single-family homes saw their sales fall by 7%, while those of condominiums fell by 10%.
The APCIQ said median prices fell from $580,000 in April for single-family homes to $576,000 in May, their second straight monthly decline, the first since June 2021. However, the median price for last month is still 16% higher than in May 2021.
New listings for sale jumped 12% last month to 7,152 from 6,360 a year ago. The number of active registrations, however, remained virtually unchanged from May 2021.
“Never have so many new properties been put up for sale on the Montreal census metropolitan area (CMA) market for this time of year since 2014,” said the director of the Market Analysis Department. of the APCIQ, Charles Brant, in a press release. “This is the first time since 2015 that the Montreal CMA market has recorded an increase (0.3%) in its inventory of properties on the market for this period of the year. It is also the first month, all periods combined, since September 2015.”
The APCIQ points out that the month of May marks an important turning point for market conditions in the Montréal CMA. “Posting a fifth consecutive month of increase in the number of properties on the market, which is symptomatic of a change in trend, we are now seeing a level of listings that exceeds that of the same period last year. The number of active listings was 11,269 in May 2021, and reached 11,304 in May 2022.
Threat of stagflation
All of this is taking place against an economic backdrop that points to a higher risk of stagflation. With economic growth stalling and inflation remaining stubbornly high, Canada appears to be heading for a new period of stagflation, the last episode of which dates back to the 1970s, economists observe. Today, some experts point out that the conditions are in place for a return of this economic phenomenon.
“I would say that next year we are looking at a recession in this country, which, combined with sustained inflation, could translate into stagflation,” notes Armine Yalnizyan, economist and member of the Atkinson Foundation. “We cannot dodge the global forces that are pointing towards recession […], the question is whether rising interest rates will slow inflation. »
But this return to stagflation could present a milder version of this economic anomaly. “I don’t think it’s unrealistic to expect to see a world where inflation and unemployment will rise,” said Fred Bergman, senior policy analyst at the Atlantic Provinces Economic Council, a think tank independent business based in Halifax.
“We could see these two [éléments] climb together, which is rare. But it will be very modest compared to what we saw in the 1970s and 1980s.”