On the eve of a possible hike in the key rate on Wednesday, the real estate industry is seeing a strong comeback from buyers, even if the maintenance of a low level of inventory on the resale market continues to limit the number of transactions.
According to the latest data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ), there were 4,428 residential sales in May in the greater Montreal area, a decrease of 8% (or 393 transactions) compared to the same month last year.
Apart from 2020, which was exceptionally low due to the pandemic, we have to go back to 2015 to observe such a low level of sales for the month of May, specifies the APCIQ.
Nevertheless, economist Charles Brant, director of the APCIQ’s market analysis department, sees things positively. “The Island of Montreal market recorded an astonishing performance with a drop in sales of only 5% compared to last year,” he said. In addition, only a slight pullback in prices is now observable from last year’s peak.
In fact, the median price of transactions is down only 4% compared to May 2022. In addition, the volume of registrations, although still considered low (-11%), increased by 46% compared to its level a year ago.
Bank of Canada expected
The governor of the Bank of Canada is due to announce his decision on the key rate on Wednesday. In the event of a new increase, we would be talking about a ninth action in 15 months to curb inflationary forces.
It should be noted, however, that despite some improvement, the slowdown in activity continued almost everywhere on the territory of the Montreal CMA in and in all categories of properties, starting with plexes (-19% ) and condominiums (-10%). Similarly, most sub-sectors in the metropolitan area are experiencing a drop in sales. Laval, the North Shore and the South Shore of Montreal stand out with respective declines of -12%, -11% and -1%.
For the first five months of the year, the situation is not much better. There have been 16,871 sales since January, compared to 22,555 on the same date in 2022. This is, precisely, a decline of 25% compared to the first five months of last year.
“Unshakeable” market in Quebec
For the Quebec region, sales in May rank third for the best level of activity ever recorded for this period of the year.
There are more and more properties available, since the listing rate has increased by 24% compared to 2022 and the percentage of sales is similar to that of last year with a drop of 2%. The median price of single-family homes is up 2% compared to the previous year.
“The Quebec City market experienced an intensification of its transactional activity in May. Buyers continue to be encouraged by the strength of the market and its outlook for appreciation, which seems unshakeable,” said Charles Brant. It is also interesting to see that the number of new listings is changing favorably, making it easier for buyers to find a property.”
– With the collaboration of QMI