The slowdown in real estate market activity is less pronounced in the Quebec region.
• Also read: What will be the impact of a drop in property prices?
In the second quarter, sales in the Quebec CMA fell 4%, while the decline across Quebec was 14% compared to the same period in 2021.
Despite all this, the region maintained a strong transaction level with 2,590 transactions, which remains well above the historical average since 2014, which is close to 2,200 transactions.
“Quebec City’s market is a little behind the cycle compared to other markets. Elsewhere, we see current registrations rising while they continue to compress in Quebec. That means there’s still strong activity and there’s also a real shortage of real estate in the market,” said Charles Brant, director of market analysis at the Quebec Real Estate Association (APCIQ).
One of the peculiarities of the Quebec region is the real estate prices, which are still lower. For example, in the single-family home market, the median price is $349,000 (+11%), while elsewhere in the province it is 448,694% (+20%).
“The prices trigger a certain enthusiasm among households. They are still very attractive in terms of their purchasing power and we know very well that the purchasing power of Quebec City households is entirely comparable to households in the Montreal region. That keeps the market going,” adds Mr. Brant.
“The economic base is fairly centered on services, and public services in particular. So these are salaries at a certain level that offer some stability. This also plays a role in this phenomenon. What I would also say is that there has been relatively more new construction in Quebec City than anywhere else in the province. »
According to Mr. Brant, the market in Quebec City’s CMA was less subject to overbidding than other markets further south, such as Montreal.
“Probably fewer own investors are active in the market, less speculation. For this reason, the price in Quebec is also developing in a more balanced way […], while elsewhere we see overruns of 20%, 25%, and 30%. »
“This is very good for the Quebec market because we cannot speak of an overvaluation risk in this market, only a catch-up and a healthy price development in line with economic fundamentals, especially household purchasing power,” explains Mr. Brant.
The Bank of Canada’s latest rate hike comes at a time when house prices are at an all-time high.
“We believe that in Quebec, where overheating has been brought under control, where there has been little divergence and where prices are tied to economic fundamentals, the risks of overvaluation are less significant and the market could therefore navigate this phase of rate hikes with more composure than other markets, with maybe small declines, but really small corrections in our opinion,” he concludes.