Rate hikes and inflation are being reflected in the housing market, where there is a “change of tone” among buyers and sellers, observes Royal LePage, which is eyeing the coming months to gauge trends.
Posted at 8:00 am
In the greater Montreal area, the real estate agency continues to expect house prices to rise 12.5% in 2022 house price study forecasts a significantly lower increase for the second half of the year.
This portrait of Royal LePage comes this Wednesday, as some observers think the Bank of Canada could announce a three-quarters-of-a-percentage-point hike in interest rates. This would reach 2.25%.
The market is slowing down because of interest rates, and inflation is also changing the game because of its impact on the cost of living. In the typical buyer, there may be a slight erosion of trust.
Marc Lefrançois, Certified Real Estate Agent in Montreal
The study presents quarterly information on residential real estate across Canada and in the country’s 62 largest real estate markets. The data includes both resale market properties and new construction.
In a sign of the changes observed, the Association professionnelle des courtiers immobiliers du Québec (APCIQ) on Tuesday reported a 14% drop in transactions across the province between April and June, while new registrations fell by 9%. In the greater Montreal area, sales fell 13% while listings rose 1% for the first time since 2015.
With the lifting of health restrictions, a “seasonal factor” not observed for two years is back, stresses Mr Lefrançois.
“This year, people decided to travel and left,” he says. This too contributes to the change in tone and slowdown. When everyone is back we can really feel the pulse of the market. »
An effect of Law 96?
Royal LePage also toned down a passage in his portrait that the French Language Act (Bill 96) saw as a “red flag” for the western Montreal market. This finding was classified as “premature” by APCIQ.
According to the real estate agency, the strengthening of the French language charter “contributes” to the “current mutation of the Montreal market”. She comes to this conclusion based on the experience of real estate agent Sean Broady in Beaconsfield on the West Island. In the “last few weeks” he had put up two properties for sale because the linguistic climate had prompted his customers to pack.
Questioned during a telephone interview, Mr Broady said he didn’t want to “sound too alarming”, adding that these were rather “anecdotal” situations.
is [la loi 96] will a huge offer arise in the west island and everyone will leave? no But these are things I hear. For Anglophones and especially immigrants whose third language is French, we see this as a concern.
Sean Broady, broker in Beaconsfield
Mr Broady explains that in one case a couple put their house up for sale after his daughter left the house. The language climate encouraged the couple to sell the property more quickly, the agent claims. Some say they are concerned about the rules regarding the use of Molière’s language in the workplace and when using services, for example in the healthcare sector, reports Mr Broady.
When asked to comment on this passage of the study, Mr Lefrançois said he “doesn’t see the same thing” in neighborhoods like Ahuntsic and Villeray, where he has a strong presence. The broker considers it relevant to “note” what his colleague has observed, adding that it is a “very sectoral” situation.
Charles Brant, director of market analysis services at APCIQ, believes it’s “a bit early to draw conclusions” similar to those drawn by Royal LePage in his study. Registrations increased throughout the Montreal area in the second quarter, not just in the West Island, Mr. Brant said. This is due to the “financial situation of households,” not current policies, he adds.
- The Bank of Canada’s policy rate. That could change this Wednesday with an expected central bank decision.
Source : The press