As we approach fall, Canadians are beginning to shift from outdoor activities to cosier indoor pursuits. For homeowners and potential buyers, this season may raise questions about the right time to make real estate decisions. Whether you’re considering selling your property or buying a new one, the timing is a critical factor. In this article, we’ll explore the latest trends in the Greater Montreal real estate market, providing valuable insights for those looking to make informed decisions.
Assess Your Needs and Borrowing Capacity
The right time to buy a property is a highly individual decision. It hinges on your specific needs and financial situation. Begin by assessing your borrowing capacity, establishing your search criteria, and seeking the guidance of a local real estate expert. Given the complexity and competitiveness of today’s real estate market, a professional’s advice is invaluable.
A Closer Look at the Third Quarter
In the third quarter of 2023, Greater Montreal’s real estate market exhibited some interesting trends. After a stronger appreciation than anticipated in the second quarter, price increases moderated between July and September. According to the Royal LePage House Price Survey and Market Forecast, the aggregate price of a property in the Greater Montreal Area saw a modest increase of 0.6% compared to the previous quarter, reaching $575,400. However, in a year-on-year comparison, the region experienced a 3.7% increase.
Property Type Breakdown
Breaking down the market by property type, the median price of a single-family detached home increased by 3.9% year over year, reaching $645,800 in the third quarter of 2023. It remained relatively stable on a quarterly basis, with just a 0.3% increase. During the same period, the median price of a condominium rose by 4.0% year over year, but it did decline by 2.6% between the second and third quarters, settling at $449,700. These price data figures encompass both resale and new build properties.
While prices seemed to stabilize during the third quarter, experts believe this period of calm may be temporary. The market continues to slightly favor sellers, but there’s an emerging balance between buyers and sellers. High-end property buyers have shown a dampened appetite, leading to an increase in the supply of homes priced at two million dollars or more. In times of rising inflation, consumer spending tends to prioritize essential needs. However, experts believe that if homeowners are looking for properties that enhance their quality of life, they may return to the market at a later date. The entry-level segment remains active, but inventory shortages persist.
Interest Rates and the Future
With housing supply shortages still a concern, experts suggest that the Greater Montreal Area real estate market could quickly shift back to a strong seller’s market. Opportunities for buyers who choose to wait may not significantly improve in the long term, as interest rates are expected to remain stable for the coming months.
The Role of the Bank of Canada
Economists are divided on whether the Bank of Canada will maintain its key lending rate or increase it in the next announcement scheduled for October 25th. Recent economic data, including flatlined GDP in July and steady employment rates, present a mixed picture. Inflation figures, to be revealed on October 17th, may influence the central bank’s decision. Although prime interest rates have reached their highest level in 22 years, they are now back to historical norms. However, a notable difference from past decades is that household incomes have not kept pace with property price appreciation.
Despite the stabilization of prices in the third quarter, this marks the first time since the second quarter of 2021 that there has been a year-over-year increase in residential real estate transactions. Royal LePage maintains its price forecast for the Greater Montreal Area, anticipating an 8.0% year-over-year increase in the aggregate property price by the fourth quarter of 2023. This means that between the third and fourth quarters of 2023, the aggregate property price in the Greater Montreal Area is expected to rise by 2.1%, closing the year at $587,844.
While prices have seen disparities across Quebec markets, the regions outside the Greater Montreal Area have experienced rises in property prices, with some quarterly fluctuations. The stability of prices in the fourth quarter will depend on the Bank of Canada’s decision on October 25th.
In conclusion, the real estate landscape in the Greater Montreal Area is influenced by various factors, making timing and expert advice essential for anyone looking to make a move in this market. For the most accurate and up-to-date information, consulting with a local real estate expert is strongly recommended.