Residential Real Estate | The exodus of Montrealers to the region is running out of steam

The mass exodus to the outer regions of Greater Montreal is “well and truly over,” according to the Quebec Professional Association of Real Estate Brokers (QPAREB). And that is one of the reasons that would explain the vigorous recovery of the market in July in the metropolis.

Residential sales in July in the Montreal area increased by 12% compared to the same period last year. The organization counted 3,439, or 363 more than in July 2023, according to data released by the QPAREB on Tuesday.

On the one hand, Mr. Brant notes a slowdown in the flight from urban centres and telework, which had been propelled by the pandemic. On the other hand, he points out that more foreign arrivals have been settling in Montreal since then.

The population of the Island of Montreal experienced historic growth and increased by more than 90,000 inhabitants between 2022 and 2023, according to the most recent figures available published by the Institut de la statistique du Québec.

This is not, however, a return to the pre-pandemic market. The director indicates that the job market is less homogeneous than it was before. “There are also people who have a slightly more hybrid work mode, and then there are those who want to have a pied-à-terre in Montreal,” explains Mr. Brant.

According to the APCIQ report, all types of properties benefited from sales growth in one year: single-family homes, by 8%; condominiums, by 20%; and small income properties, by 3%.

Total residential sales in the province also saw strong growth in July, up 12% year-on-year, according to statistics from the brokers’ association.

According to journalist and columnist Yvon Laprade, author of the book The Great Escape: Stories of City Dwellers Who Chose the Regionsthose who really wanted to leave the Montreal region have done so in recent years.

“It doesn’t surprise me that [le pic de l’exode vers les régions] “is over,” he said. “There may be an increase in sales across the province, but there may be less movement [entre Montréal et les régions] ” adds Mr. Laprade.

Better conditions for buyers

“As for Montreal, price increases are tending to stabilize,” the APCIQ analyzes in its report. In one year, the median price of residential properties has increased between 3 and 6%, depending on the type of property.

“This development allows buyers to better benefit from the full impact of lower mortgage interest rates,” explains the director of the market analysis department of the brokers’ association.

After lowering its key rate last June, a first in more than two years, the Bank of Canada announced a further rate cut on July 24, bringing it to 4.50%.

The lenders’ prime rate has followed the same trend. For example, Desjardins is offering a 70 basis point discount on its prime rate for a 5-year variable-rate mortgage. The fixed rate for the same term is currently being offered at 5.19%, on promotion.

Brant says the rate cuts are having a bigger impact on expensive markets like Montreal. “When you have a big mortgage on a $600,000 home, versus a cheaper home somewhere else, it really makes a difference in your monthly payments,” he says.

And in July 2024, a single-family property sold in 6 days more than in the same period last year, or in 52 days on average.

“In other words, people are taking longer to buy a property. The negotiating power of buyers is greater than before,” explains Charles Brant.

In his book, Yvon Laprade points out that the bidding war that was raging in the Montreal region during the pandemic was one of the main motivations for many Quebecers to move to the region.

Some drawbacks

However, National Bank Financial put some reservations on this increase in property resales in a note to investors published on Tuesday.

“Indeed, although the monetary easing cycle has begun, interest rates remain largely restrictive,” notes economist Daren King.

He points out that the job market in Montreal deteriorated rapidly during the month of July. The unemployment rate in the metropolis now stands at 6.7%, a percentage higher than the national average, which stands at 6.2%.

The Quebec region in reverse

Charles Brant also notes that the data on residential sales is not as conclusive for the capital, compared to the province as a whole.

“In Quebec, we are still in a market that is extremely tense and unbalanced in favor of sellers. And there is no sign of improvement at this level,” he reveals.

While residential sales have increased slightly, the median price of properties has grown by up to 15%. And their sale time has shortened: for example, a plex of two to five units sells on average in 20 days less than last year in Quebec City.