After having happily taken advantage of the higher bid, brokers and sellers will now have to be more patient and less greedy, reveals the latest study by Royal LePage.
Posted at 10:24 a.m.
On the ground, brokers and sellers suspected it, but hoped for a simple seasonal slowdown. However, the data for the third quarter of 2022 are categorical: the Greater Montreal real estate market has just suffered the first quarterly correction in property prices in more than five years.
“As for Montreal, we really hit a wall,” said Marc Lefrançois, chartered real estate broker at Royal LePage Tendance in Montreal, in a telephone interview. It happened instantly. People said: I’m quitting, we don’t bid any more, we don’t participate in multiple offers, financing is too expensive. »
With the exception of the South Shore of Montreal, all of the regions studied by Royal Le Page saw the price of the median value of all types of properties decline from one quarter to the next. West and central Montreal saw the first year-over-year decrease in the price of detached single-family homes since 2018, the study said.
Of course it was going to come at some point, because you can’t stretch the elastic band of increases by 15 to 20% per year. Wages are not following, inflation is not following either. It was not normal.
Marc Lefrançois, Chartered Real Estate Broker at Royal LePage Tendance
Marc Lefrançois observes a change in mentality among buyers. For two years, the buyer preferred to buy immediately even if he paid 10% more than the market value, because prices were rising at lightning speed. Buyers thought, “If I wait another year, it’s going to cost me 25% more. »
“But from May and June, people no longer believed that. It’s as if everyone passed the memo at the same time. »
For now, selling prices are still higher than in 2021, but tend to stabilize on an annual basis, while market conditions return to equilibrium, said Royal LePage. The still present demand and the chronic lack of supply of housing should support a moderate rise in prices in the medium and long term.
“For 25 years, real estate has always been a good investment and it should continue to be. It’s just that at the moment, we are in a period of adjustment to find where the real point of balance is, ”concludes Marc Lefrançois.