Quarterly Window on the Real Estate Market: Relative Price Stability and a Propensity for Buyers and Sellers to Wait, in the Last Quarter of 2022
L'ÎLE-DES-SOEURS, Quebec, Jan. 12, 2023 (GLOBE NEWSWIRE) -- The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its quarterly residential real estate market statistics for the province of Quebec, based on the real estate brokers' Centris provincial database.
The past year was marked by a notable slowdown in market activity. There were 87,204 residential sales across the province in 2022. This represents a 20 per cent drop in sales from the previous year, a historic decline after exceptionally high levels of activity during the pandemic period. This decline increased in the second half of the year. The fourth quarter saw sales fall to a level not seen since 2014 for this time of year.
The acceleration of the downward trend must be put into context, however, as 2022 is still above the average for the last decade. Indeed, the year shows the fourth-highest level of sales since the Centris system for real estate brokers has been compiling data.
"The magnitude and speed of the interest rate increase began to materialize in the third quarter of the year. There was a sharp decline in the ability of buyers to qualify for mortgage financing. The fourth-quarter results reflect more tangibly the impact of this phenomenon on sales, but also the generalized wait-and-see attitude of buyers who anticipate that market conditions will continue to deteriorate in their favour. This deterioration had already been reflected in the third quarter by a significant drop in prices compared to the second quarter, in the markets that had been most exposed to overheating and overbidding," said Charles Brant, Director of the QPAREB's Market Analysis Department. "It is interesting to note that market conditions deteriorated only very gradually in the fourth quarter, despite the sharp decline in sales. They remain clearly favourable to sellers. While, indeed, in a context of lower activity, we generally see a backlog of properties that are not finding takers on the market, new listings are down in the fourth quarter. This is a rather unusual situation in such a bear market. This context is indicative of sellers' propensity to wait before lowering their price or to temporarily withdraw their property from the market. Potential sellers, on the other hand, are still able to wait for conditions to stabilize before putting their property on the market. This situation explains the reduced number of forced sales and repossessions. As a result, home prices remained relatively stable in the last quarter of the year, both in comparison with last year and the previous quarter," he explains.
Annual Highlights for the Province
Sales
- Across the province, the decline in transactional activity was observed in all property categories, with variations between -18 per cent and -27 per cent. Plexes with two to five units stood out with a more significant decline in sales (-27 per cent in one year). Condominiums and single-family homes registered declines of -22 per cent and -18 per cent, respectively.
- In terms of metropolitan areas, the Montreal and Gatineau CMAs registered the largest decreases, at -22 per cent and -21 per cent. Sales were also down in the Sherbrooke (-17 per cent), Saguenay (-17 per cent) and Quebec City (-13 per cent) CMAs. Finally, with a decrease of -8 per cent compared to last year, the Trois-Rivières CMA had the smallest decrease in transactional activity.
- Among the smaller urban centres, some localities stood out with a more significant decrease in sales between 2021 and 2022. Mont-Tremblant had the largest drop in sales, with a -44 per cent decrease over the past year. The markets of Salaberry-de-Valleyfield (-30 per cent), Saint-Sauveur (-27 per cent) and Sainte-Adèle (-27 per cent) also registered significant decreases.
- A group of small urban centres was closer to the provincial average (-20 per cent), with sales decreasing by between -9 per cent and -26 per cent. Among the localities that registered a more pronounced decline than the province were Sorel-Tracy (-24 per cent) and Granby (-21 per cent). The markets of Shawinigan (-15 per cent), Joliette (-14 per cent) and Saint-Hyacinthe (-14 per cent) were among those that slowed down less.
- Finally, the Drummondville market saw its transactional activity remain steady, with an annual variation of +2 per cent.
Active Listings
- Active listings reached 26,340 in 2022, according to the Centris system, for an annual increase of +5 per cent. This is a sign of the rebalancing process that is gradually taking place in the real estate market, as this is the first increase in active listings since 2015. In reality, the increase in listings is more of a process of accumulating properties that are not finding takers on the market, rather than the tangible addition of new listings, month after month. This leads to a fairly slow uptick in the time it takes to clear the property inventory on the market.
Median Price
- Province-wide, the median price of single-family homes was $415,500, an increase of +14 per cent between 2021 and 2022.
- The median price of condominiums registered an increase of +12 per cent to reach $366,000 in 2022.
- The median price of small income properties has also been growing in the past year. With a +10 per cent increase from last year, the median price of plexes now stands at $505,000.
Market Conditions
- Despite declining sales and a trend towards the accumulation of residential properties, the market still strongly favours sellers in the province. This is reflected in a slight increase in the number of months it takes to clear the inventory of residential properties on the market. The number of months required to clear the inventory is 3.6 months (all categories combined) in 2022.
Selling Times
- As a sign of the continuing tension in the province's single-family home market, the average selling time was 41 days in 2022, 10 days less than a year earlier. It should be noted that the sale time for single-family homes has never been this low since 2000.
Quarterly Highlights for Metropolitan Areas
- For a third consecutive quarter, residential sales are down in the Montreal CMA. With 7,692 properties sold on the residential market, this represented a -37 per cent decrease compared to the fourth quarter of 2021. Condominiums and plexes registered the largest drops, with decreases of 40 per cent and 52 per cent, respectively. For their part, single-family homes experienced a more modest decrease in sales at -32 per cent.
- The number of months required to clear the inventory of residential properties in the Montreal market was 3.5, a slight increase for the fourth quarter of 2022. Several sectors on the outskirts of the Island of Montreal showed signs of weakness with a significant increase in active listings. In total, there were 15,543 active listings in the CMA, an increase of +60 per cent compared to the same period a year ago. Such an inventory, which is still very low, has not been observed in the Montreal CMA territory since the fourth quarter of 2019.
- Price corrections were modest in the Montreal CMA, due specifically to activity slowed by the rapid rise in interest rates and the disappearance of the overbidding phenomenon. In a quarter-over-quarter comparison, median prices decreased by -4 per cent for single-family homes, -1 per cent for condominiums and -3 per cent for plexes.
- With 1,775 sales transactions in its territory, the Quebec City CMA saw its activity decrease by -26 per cent in the fourth quarter of 2022 compared to the same period a year ago. However, this represented 107 more sales (+6 per cent) than in the previous quarter. This growth was attributable to an increase in plex sales (+19 per cent) and single-family home sales (+7 per cent). Condominium sales remained stable (0 per cent).
- In the fourth quarter of 2022, active listings reached 3,028, up by only 7 per cent compared to the same period a year ago. Single-family homes, followed by plexes, were the categories with the most significant accumulation of properties for sale on the market, with increases of +24 per cent and +14 per cent respectively. However, the increase was not generalized to all property categories. Indeed, there were 825 condominiums available in the Quebec City CMA. This represented a decrease of -19 per cent compared to the fourth quarter of 2021, but an increase of +11 per cent compared to the previous quarter.
- Despite a slowdown in transactional activity, price adjustments were very limited in the Quebec City CMA during the last quarter. The median price of small income properties and condominiums decreased by -1 per cent and -5 per cent, respectively, compared to the third quarter of 2022. The median price of single-family homes registered a small positive change (+1 per cent).
- Across the Gatineau CMA, 858 sales were made in the fourth quarter of 2022. This represents a -32 per cent decrease in transactional activity compared to the same period last year. Note that you have to go back to the fourth quarter of 2017 to see such a low level of activity in the CMA. Although activity was down across all property categories, the decline from a year ago was most pronounced in the plex category (-51 per cent). Condominium and single-family home sales were down by 39 per cent and
27 per cent, respectively. - Although down slightly from the previous quarter, there were 1,186 active listings in the Gatineau CMA. This level of property inventory represents +82 per cent more listings than in the fourth quarter of 2021. Despite this accumulation of properties on the market, the number of months to clear the inventory remains below the 3-month mark, at 2.6 months. It should be noted that the number of months to clear inventory is even lower for single-family homes (2.5 months) and condominiums (2.3 months).
- The median price correction was greatest for plexes in the fourth quarter of 2022, with a -13 per cent decrease from the previous quarter. Single-family homes and condominiums declined by -4 and -5 per cent, respectively. It should be noted, however, that on an annual basis, median prices are fairly stable with changes between -1 per cent and +6 per cent.
- With 412 transactions completed in the fourth quarter of 2022, sales in the Sherbrooke CMA were down by -22 per cent compared to the same period last year. All three major property categories also registered a year-over-year decline, with single-family homes down 21 per cent, condominiums down 20 per cent and plexes down 24 per cent.
- Active listings in the Sherbrooke CMA increased by +39 per cent compared to the same quarter last year. This increase was driven by single-family homes, whose listings rose by +53 per cent. Condominiums and plexes also registered an increase in their inventory of available properties, with variations of
+13 per cent and +28 per cent. The number of months required to clear inventory is up, but remains very low at 2.9 months (all categories combined). - In the fourth quarter of 2022, the median price for small income properties was $382,500 and was up
+20 per cent from the same period a year ago. With an increase of +11 per cent, the median price of condominiums reached $265,900. Single-family homes were sold at a median price of $350,000, an increase of +9 per cent. It should be noted, however, that when comparing the median prices to those of the third quarter of 2022, the price of condominiums is down slightly (-2 per cent), while the other two categories are still recording increases.
- The market slowdown is less felt in Trois-Rivières, with a -16 per cent decline in residential sales compared to the fourth quarter of 2021. With 329 sales, this quarter recorded a comparable level to the fourth quarter of 2019 (332 sales). 2019 was already a record year for pre-pandemic sales for this metropolitan area. Still, declines of -25 per cent and -24 per cent were reached for plexes and condominiums respectively. While the decline is only -9 per cent for single-family homes.
- In the Trois-Rivières CMA, active listings followed the general trend for this fourth quarter, with an increase of +16 per cent compared to the same quarter last year. There were 302 active listings for this last quarter of the year 2022. This is also a continuous increase in consecutive quarters since the beginning of the year. This increase is primarily explained by single-family homes and condominiums, while the number of active listings for small income properties is down -18 per cent from last year. The number of months required to clear the inventory is up to 2.2 months (all categories combined).
- On an annual basis, median prices increased for all residential categories, with plexes increasing by
+6 per cent to $259,950, condominiums by +15 per cent to $232,500 and single-family homes by +20 per cent to $284,500. However, despite this annual increase, a decrease for plexes and single-family homes is observable, if we compare this last quarter with the third of 2022.
- With 212 sales in the fourth quarter of 2022, the Saguenay CMA recorded a -37 per cent decrease compared to the fourth quarter of 2021. This is close to its pre-pandemic level. The decreases are present in all property categories, particularly for plexes and single-family homes, with -40 per cent and -38 per cent, respectively, compared to the same quarter last year.
- Active listings, as in most areas of Quebec, have stopped decreasing compared to previous years. In fact, for the first time since the first quarter of 2019, they are stable compared to the last quarter of last year, with 462 active listings. With 3.9 months to clear residential property inventory, this is the first time since the third quarter of 2017, that the number of months is up from the previous quarter. This is due to an increase in active listings and a level of sales comparable to pre-pandemic data.
- Compared to the third quarter of 2022, median prices are down in the various residential categories. However, only for small income properties are median prices also declining on an annual basis, by
-4 per cent.
Quarterly Highlights for Large Agglomerations (excluding CMAs)
Sales
- Urban centres outside of metropolitan areas recorded 2,444 sales in the fourth quarter of 2022, down -26 per cent from the same period last year. This downward trend was driven by some markets that experienced a larger decline. This was the case in Mont-Tremblant (-44 per cent), Sainte-Adèle (-39 per cent), Saint-Hyacinthe (-38 per cent), Salaberry-de-Valleyfield (-37 per cent), Granby (-32 per cent) and Joliette (-32 per cent). Other localities experienced a smaller than average decline. These communities included Saint-Sauveur (-25 per cent), Sorel-Tracy (-21 per cent) and Shawinigan (-18 per cent).
- For single-family homes, the decline in sales was -22 per cent in the fourth quarter of 2022 compared to the same period a year ago. Markets such as Mont-Tremblant (-49 per cent), Sainte-Adèle (-37 per cent), Granby (-37 per cent), Salaberry-de-Valleyfield (-30 per cent), Saint-Hyacinthe (-28 per cent) and Joliette (-23 per cent) registered the largest decrease in sales. Some markets, such as Shawinigan
(-19 per cent) and Sorel-Tracy (-9 per cent), registered a more modest decrease in sales. - The decline in condominium sales was -35 per cent in the fourth quarter of 2022 compared to the same period a year ago.
Active Listings
- Active listings in urban centres outside of metropolitan areas increased by +28 per cent compared to the same quarter last year. This increase was driven by condominiums, where listings rose by +52 per cent. Single-family homes also saw an increase in the accumulation of properties available for sale on the market, with a +31 per cent change. The number of months required to clear the inventory is up to 3.7 months (all categories combined).
- This upward trend is driven by certain markets that have experienced stronger growth. This was the case in Saint-Sauveur (+78 per cent), Joliette (+56 per cent), Granby (+53 per cent), Sainte-Adèle (+46 per cent), Drummondville (+39 per cent), Sorel-Tracy (+33 per cent) and Mont-Tremblant (+29 per cent). Other localities experienced a smaller than average increase. These included Saint-Hyacinthe (+13 per cent), Salaberry-de-Valleyfield (+14 per cent) and Shawinigan (+7 per cent).
Median Price
- In the fourth quarter of 2022, the trend is finally catching up with that of the agglomerations outside the CMAs. The median price of single-family homes was $305,000, an increase of only +3 per cent compared to the same period last year. It should be noted that this was a -3 per cent decrease from the previous quarter. The majority of urban centres outside of metropolitan areas saw a price increase between the fourth quarter of 2021 and the fourth quarter of 2022. However, the picture is more nuanced, with both positive and negative changes, when comparing the change between the last two quarters of 2022.
- Condominiums, for their part, recorded an increase in their median price of +20 per cent compared to the fourth quarter of 2021. The median price reached $295,000 in the fourth quarter of 2022. The change between the last two quarters was smaller (-1 per cent).
Additional information:
To view the previous quarterly Window on the Real Estate Market, click here.
If you would like additional information from the Market Analysis Department, such as specific data or regional details on the real estate market, please write to us.
About the Quebec Professional Association of Real Estate Brokers
The Quebec Professional Association of Real Estate Brokers (QPAREB) is a non-profit association that brings together more than 14,000 real estate brokers and agencies. It is responsible for promoting and defending their interests while taking into account the issues facing the profession and the various professional and regional realities of its members. The QPAREB is also an important player in many real estate dossiers, including the implementation of measures that promote homeownership. The Association reports on Quebec's residential real estate market statistics, provides training, tools and services relating to real estate, and facilitates the collection, dissemination and exchange of information. The QPAREB has its head office in Quebec City, administrative offices in Montreal and a regional office in Saguenay. It has two subsidiaries: Société Centris inc. and the Collège de l'immobilier du Québec. Follow its activities at qpareb.ca or via its social media pages: Facebook, LinkedIn, Twitter and Instagram.
About Centris
Centris is a dynamic and innovative technology company in the real estate sector. It collects data and offers solutions that are highly adapted to the needs of professionals. Among these solutions is Centris.ca, the most visited real estate website in Quebec.
For more information:
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Morin Relations Publiques
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