Montreal Home Sales Drop 15% in January Amid Supply Shortage & Rising Prices
- Montreal’s housing market is showing signs of a slowdown, with sales declining in January while prices continue to rise, driven by a persistent shortage of available properties.
- According to the Quebec Professional Association of Real Estate Brokers, January saw 2,364 properties change hands in the Montreal census metropolitan area, a 15 percent decrease compared to...
- Charles Brant, the board’s market analysis director, noted that the scarcity of properties continues to exert upward pressure on prices, particularly for multiplexes.
Montreal’s housing market is showing signs of a slowdown, with sales declining in January while prices continue to rise, driven by a persistent shortage of available properties. The trend reflects a broader pattern across Canada, where affordability challenges and economic uncertainty are impacting the real estate sector.
According to the Quebec Professional Association of Real Estate Brokers, saw 2,364 properties change hands in the Montreal census metropolitan area, a 15 percent decrease compared to the 2,774 sales recorded during the same period last year. Despite the drop in transaction volume, median home prices increased across all property categories.
Charles Brant, the board’s market analysis director, noted that the scarcity of properties continues to exert upward pressure on prices, particularly for multiplexes. “Despite a slowdown in activity, the scarcity of properties continues to drive up prices,” Brant stated. This dynamic suggests a market where demand, though cooling, still outstrips supply, leading to price appreciation in certain segments.
The median price of multiplexes – buildings with two to five units – experienced the most significant increase, rising 8 percent year-over-year to $841,800. Single-family homes saw a 4 percent increase in median price, reaching $615,000. Condominium prices also edged upward, increasing by 2 percent to $428,000.
While sales declined, new listings saw a modest increase. A total of 6,550 new properties were listed for sale in , representing an 8 percent rise compared to . This increase in supply, however, has not been sufficient to alleviate the overall shortage, contributing to the continued price growth.
The situation in Montreal mirrors national trends observed at the close of . A report from WOWA.ca, updated on , indicates that average home prices across Canada were higher year-over-year in most provinces in . However, significant declines in Ontario and British Columbia pulled the national average into negative territory, falling to $673,335 – a 1.3 percent decrease month-over-month and 0.5 percent lower than the previous year.
Nationally, 39,134 homes were sold in on a seasonally adjusted basis, a 7.4 percent decrease compared to the previous year. The national benchmark home price also continued its downward trend, declining for the seventh consecutive month to $660,300 – a 4.0 percent decrease year-over-year.
The Canadian housing market has demonstrably moved past its previous peak, entering a period characterized by declining prices, reduced sales, and a generally softer market, according to a report by Moody’s. This shift is attributed to a combination of interest rate tightening by the Bank of Canada and diminishing affordability for prospective homebuyers.
The impact of these factors has been uneven across the country. Overvalued markets, such as Toronto, Hamilton, and Vancouver, have experienced more pronounced declines. However, the Montreal market, while facing challenges, appears to be demonstrating relative stability compared to these regions.
Looking ahead, the Fall Housing Supply Report suggests that ground-oriented construction – including single-detached, semi-detached, and row homes – has seen modest growth, spurred by lower mortgage rates in more affordable markets. However, in higher-cost centers like Toronto and Vancouver, affordability remains a significant constraint, leading to caution among potential homebuyers.
The Desjardins Group anticipates that housing prices and sales in Montreal will remain relatively stable in the first half of , with a potential for a slight uptick in sales around mid-year, contingent on anticipated key rate cuts by the Bank of Canada. While prices are expected to continue rising, a surge similar to that experienced during the pandemic is not foreseen.
The Montreal housing market’s current state reflects a complex interplay of factors, including limited supply, rising interest rates, and broader economic conditions. While the market is experiencing a slowdown in sales, the underlying scarcity of properties continues to support price growth, particularly in certain segments. The situation warrants close monitoring as the Bank of Canada’s monetary policy and overall economic conditions continue to evolve.