Quebec City saw its third-highest number of October residential sales in 23 years, while residential transactions in Montreal dipped to “anemic” levels in October 2023, according to Quebec Professional Association of Real Estate Brokers (QPAREB) data.

Residential sales in Montreal fell to 2,675 housing units in October 2023, a two per cent decrease compared to October 2022. QPAREB noted this is the second-lowest level of transactional activity for October in 23 years.

Meanwhile, the market stayed strong in Quebec City. The capital city of Quebec saw a 14 per cent increase compared to the same month last year, marking 729 residential sales in October 2023.

“The combination of various negative factors has fuelled a sense of caution and led to a deferment of purchasing plans,” Charles Brant, QPAREB’s market analysis director, said of the Montreal data in a release.

In contrast, Brant was upbeat about Quebec City, saying it “continues to impress with its imperviousness to national bad news,” though he did voice caution about price increases.

QPAREB is a non-profit real estate broker association based in Quebec City representing thousands of brokers and agencies.

“Booming” Quebec City growth

Brant said the Quebec City market is bolstered by a robust economy and gradually growing property prices.

The Agglomeration of Quebec City and the Northern Periphery marked annual increases of 16 per cent and 23 per cent, respectively, to 507 sales and 90 sales.

The South Shore of Quebec City saw 132 sales in October 2023, a two per cent increase compared to the same period a year ago.

Single-family home sales in Quebec City increased by four per cent to 443 sales on a year-over-year basis. Condo sales jumped 30 per cent to 224 transactions. Small income properties saw a 42 per cent leap in sales, totalling 61.

There were 3,029 active listings in October 2023, a three per cent increase over October 2022. The biggest growth was for single-family homes at nine per cent, followed by condos at two per cent. Inventory for plexes dipped by 18 per cent.

The median price of a single-family home in Quebec City was $350,000 in October 2023, up one per cent from the same month last year. Condo median prices rose four per cent to $249,000. Median prices for plexes fell nine per cent year-over-year to $385,000.

Despite the positive signs, Brant warned the situation is subject to change if prices continue to increase at the same pace in the coming months.

“As in any market that presents problems of imbalance between supply and demand, the continuous rise in prices attracts investors despite the higher interest rates. This context could exacerbate speculative behaviour harmful to the housing market in general,” he said.

Montreal’s housing market slowdown

Trends for residential sales in the main metropolitan areas of Montreal provided a contrast.

The Island of Montreal and South Shore of Montreal, with 1,022 transactions and 654 transactions respectively, saw increases of seven per cent and eight per cent compared to October 2022.

The same could not be said of the North Shore of Montreal (607 sales), Laval (235 sales), Vaudreuil-Soulanges (105 sale) and Saint-Jean-sur-Richelieu (52 sales), which experienced declines of 12 per cent, 17 per cent, 19 per cent and 30 per cent, respectively.

Sales for single-family homes were down by six per cent compared to last year, dropping to 1,347 sales. Condo sales stood steady at 1,018 sales – almost identical to October 2022. Sales of small income properties rose 10 per cent to 307 sales.

Active listings rose to 17,518 properties in October, up 12 per cent over a year ago. QPAREB said the inventory of available properties has reached a level not observed since the summer of 2019, before the COVID-19 pandemic.

Median prices for residential properties rose in Montreal compared to last year:

• single-family homes increased seven per cent to $545,000;
• plexes rose five per cent to $735,000; and
• condos ticked upward three per cent to $390,000.

“While there are fewer active buyers in the market,” Brant said “there continues to be latent interest in buying a property.” He cited “negative factors” that fuelled uncertainty which delayed purchases, such as the slowdown of the economy and difficulties in accumulating savings.

Brant also noted fixed interest rates, preferred for most new mortgages, have been well above six per cent for the shortest terms since September, further limiting buyers’ ability to qualify with conventional lenders.

“The result is an increase in the number of properties on the market to a level not seen since the start of the pandemic,” he said.

The conditions are conductive for a market rebalancing, plateauing or decline in prices and providing more choices for experienced buyers with enough equity to avoid the need for significant mortgage financing, he continued.