– QFREB 2018 results and 2019 forecast –
Nuns’ Island, November 20, 2018 – The Quebec Federation of Real Estate Boards (QFREB) presented its 2018 results and unveiled its 2019 forecast for Quebec’s residential real estate market at its 8th annual Fenêtre sur le marché conference, presented in cooperation with Desjardins.
Portrait of Quebec in 2018
The Quebec residential real estate market already achieved record sales in 2017, and that record will be shattered in 2018 with the Centris system exceeding the 86,000 transaction mark. All census metropolitan areas (CMAs) in the province except Trois-Rivières are on track to post growth in the number of transactions this year.
“With a 5% increase in sales, Quebec is performing well in the residential real estate market compared to other provinces,” explained Paul Cardinal, QFREB market analysis manager. “Western Canada is experiencing a significant decline in activity, particularly in British Columbia, with a 23% drop to date in 2018. Ontario sales are down too, with an 18% decrease. As for property prices, Quebec is turning in the best performance with a 5% increase, all categories combined.”
With respect to market conditions, it is a seller’s market in the Montreal and Gatineau CMAs, while buyers have more bargaining power in the Quebec City, Sherbrooke, and Saguenay CMAs. In Trois-Rivières — still the most affordable area for the purchase of a property — the market is in balance.
Montreal region leads the way
Montreal’s real estate market continues to outperform the rest of the province. In addition to record sales in 2018, time to sale is falling sharply, prices are increasing steadily, and bidding above list price is common in some sectors. In terms of total sales, condominiums are the hottest category, but “plexes” are seeing the best price growth.
“Abundant condominium construction in recent years has not lowered prices as some observers feared,” said Mr. Cardinal. “Demand has held strong in the resale market, as reflected by the 15% increase in sales in this segment to date in 2018.”
Revenge of the suburbs
“Compared to 2017, when we saw strong sales growth on the Island of Montreal, the suburbs—particularly the South Shore and the Laval region—are now doing the best, with increases of 12% and 7% respectively to date in 2018. The North Shore comes in just ahead of the Island of Montreal, with a 4% increase in sales,” said Mr. Cardinal.
Bidding over list price is very common in all property categories, but particularly for plexes, with 17% of sales closing at higher than list price. Overbidding is most prevalent in Outremont, Rosemont–La Petite-Patrie, Plateau-Mont-Royal, the Southwest, and the West Island.
2019 forecast for Quebec
A strong labour market, rising disposable income, and high consumer confidence will boost home sales next year. The QFREB expects 2019 to start with a bang for the residential real estate market, with activity gradually slowing in the second semester due to steadily rising borrowing costs. The five-year mortgage rates posted by the main financial institutions will continue to climb, adding half a percentage point to end 2019 at around 6%.
Ultimately, the QFREB expects a slight 1% increase in the number of transactions in 2019, for a new record of 87,650 sales. The median price of a single-family home is expected to increase by 3%, to $257,000.
Greater Montreal in 2019
The QFREB expects Montreal’s residential real estate market to kick into high gear and perform slightly better than the province as a whole next year, due in part to steadier population growth as net migration rises.
As a result, the number of transactions in the Montréal CMA will hit a new high of 47,600 in 2019. Price growth will also be a little steadier than elsewhere in Quebec. We anticipate a 4% increase in the median price of a single-family home, to $332,000. For condominiums—for which market conditions have tightened dramatically over the past year—we expect a median price increase of 3%, to $263,000.
About the Québec Federation of Real Estate Boards
The Québec Federation of Real Estate Boards is a non-profit organization representing the province’s 11 real estate boards and their membership of nearly 13,000 real estate brokers. Its mission is to support Quebec’s real estate boards in order to defend, protect, and promote the interests of real estate brokers by providing services in the areas of professional practices, public affairs and market analysis. The QFREB is guided by an approach centred on collaboration and resource sharing.
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