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Slight increase of 1% compared to the same month last year

Residential sales market picked up last month in the Montreal area.

 

Transactions were slightly up 1% from the same month last year. This is the first annual increase since 2021. However, experts do not expect trade to accelerate in the coming months due to recent high in interest rates and the economic slowdown threat.

 

The Montreal Island area stands out with a 12% increase over the same period last year, according to the July data released by the Association professionnelle des courtiers immobiliers du Québec (APCIQ).

 

Sales times continue to increase, by about 20 days compared to the situation 12 months ago.

 

As mortgage rates are no longer on the horizon, buyers who can afford them have decided that there is no point in waiting and have taken action by acquiring a property, explains the APCIQ.

 

According to Charles Brant, the Association’s economist, the fall in prices is almost complete for 2023 and we are heading more towards a stabilization of values.

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What can we expect for the future?

The market remains supported by structural factors such as the lack of supply and the high immigration.

“In the months ahead, while strong population growth will support the market,” says Mr. King of National Bank. “ the resumption of the Bank of Canada’s tightening cycle and the slowdown in the economy should keep the number of transactions below its historical average.”

July's Montreal residential market:

+ 1% increase in transactions between July 2023 and July 2022 

+ 20% variation of properties for sale in one year

+ 1% increase in house prices compared to July 2022 

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More than 600 office buildings could convert into housing 

Montreal has no fewer than 611 office buildings that have the potential to be converted into housing, according to brokerage agency Avison Young.

 

The identification was based on the broker’s internal analyses based on two main criteria: buildings built before 1990 with a floor area of less than 15,000 square feet.

 

Since the pandemic and the rise of telework, city centres have been shunned by white-collar workers during the day. Office vacancy is approaching record levels.

 

Because of reduced foot traffic near urban stores during the pandemic, vacancy in retail space has increased and rents have declined, particularly in office-dense locations. 

 

In Montreal, the vacancy rate reached 17% downtown in the second quarter of 2023, according to the CBRE agency. The rate is 14.5% in more modern buildings of more recent construction.

 

“Owners of older buildings therefore have the opportunity to rethink their investment strategy and explore different options, whether it is to keep the building as it is, renovate it or modernize it, to innovate by reallocating it or adapting it to other uses, or to redevelop it,” suggests the real estate agency.

 

Tenants who shop premises in 2023 benefit from a favorable balance of power to choose better quality offices at advantageous conditions.

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The real estate market is cooling down in Montreal

In the Greater Montreal, home sales decreased by 10% in June over a year. We have to go back to 2015 to observe a similar level of sales for a month of June.

 

The small income property market has seen a significant drop in sales, with the number of transactions decreasing by 16%.

 

The amount of transactions also decreased. The median price of plexes was $726,500 in June, down 6%. With a median price of $390,000, condominiums were down 5% for the period. Single-family homes traded at a median price of $550,000, down 4% from last year.

The continued rise in interest rates (now close to 7% for mortgages) is certainly contributing to this cooling down period.

 

The number of properties placed on the market still jumped 32% compared to last year. Thus, 15,806 registrations were recorded in the Greater Montreal in June 2023.

 

Montreal real estate remains the most expensive in Quebec. More than 50% of marketed single-family properties are displayed at more than $700,000.

 

All in all, “prices are tending to stabilize, with market conditions favouring sellers slightly less,” summarizes the APCIQ.

 

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