The average price of houses in Canada could fall by nearly 25% by the end of 2023 from the peak reached last February, Desjardins Group economists anticipate in their updated outlook for the real estate market. residential.
Posted at 4:49 p.m.
This price drop forecast also turns out to be much more pronounced than the 15% forecast they stated just two months ago when they updated their outlook last June.
Desjardins economists attribute such a deterioration in their outlook for the residential real estate market to two main factors: the marked decline in demand among potential buyers and “the increase in mortgage interest rates more pronounced and faster than anticipated. »
In Quebec, too, Desjardins economists expect a steep drop in residential property prices between the peak reached at the start of the year and the trough anticipated at the end of next year, in 2023.
However, even if accentuated from minus 12% to minus 17%, the drop in prices in Québec promises to be a little less pronounced than in Canada as a whole.
“In Quebec, the drop in prices started a little later than in Canada, and the decline is much less pronounced. Until now, average prices have fallen by barely 2% in Quebec compared to more than 10% in Canada,” indicate the Desjardins economists in their analysis report.
Nevertheless, even if “the price correction in Quebec began with a slight lag compared to other provinces, market conditions changed just as quickly. The shortage situation (of supply versus demand) has now dissipated, as the number of potential buyers has decreased considerably and the inventory of properties for sale has started to rise. »
As a result, we expect “the downward adjustment in prices will continue and the cyclical bottom should be reached at the end of next year. That said, economists expect the average price level to remain about 20% above the level that prevailed in February 2020, just before the start of the pandemic.
In the meantime, note the economists of Desjardins, the fall in prices in residential real estate is not expected to be generalized throughout the province.
“Regional markets that have experienced less or little excess should hold up better. Conversely, the regions where the bidding has been more intense, in western Quebec in particular, will experience a more brutal landing,” the Desjardins economists anticipate.