The average price of properties 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 is also much more pronounced than the 15% forecast that Desjardins economists announced 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 that is more pronounced and faster than ‘anticipated’.
In Quebec too, Desjardins economists are expecting a sharp decline in residential property prices between the peak reached at the start of the year and the trough anticipated at the end of next year.
However, even accentuated from -12% to -17%, the fall in prices in Quebec 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 scarcity situation [d’offre par rapport à la demande] has now dissipated, as the number of potential buyers has dropped considerably and the inventory of properties for sale has started to rise again”.
Consequently, it is anticipated that “the downward adjustment of prices will continue and [que] the cyclical bottom should be reached at the end of next year”. That said, economists expect the level of average prices to remain about 20% above the level observed 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.