Montreal home sales, prices fall in ‘shift in market dynamics’

Sales are down 18% from last year

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The Montreal real estate market experienced a massive slowdown in July, joining other Canadian housing markets that showed weakness in the latest data as interest rate hikes weigh on demand.

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The median price for a single-family home in Montreal in July was $550,000, down $30,000 from the peak in April, according to data from the Quebec Professional Association of Realtors. However, prices are still 10 percent higher than last year at this time.

Condominiums, often seen as an entry point into the affordable housing market, saw their first drop in prices this year to an average of $391,500, although this is still 9 percent higher than last year.

The number of homes that are being traded is also down, with sales down 18 percent from a year earlier to a total of 3,080 homes during the month of July. As interest rates continue to rise, the market slowdown is “showing signs of intensifying,” the board added.

“Following what was reported in June, the shift in market dynamics is clearly confirmed,” said Charles Brant, Director of Market Analysis at QPAREB, in a press release accompanying the data. “The magnitude of the interest rate hike has, in just four months, accelerated the market slowdown, albeit much more gradually than in other major Canadian cities.”

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“While it is true that the summer season is usually quieter, we are seeing a marked slowdown in the pace of July sales, while at the same time active listings continue to reverse a decidedly upward trend…”

Active listings in the city rose for the sixth month in a row to 12,668, up 28 percent from July 2021.

Montreal joins other major Canadian cities such as Calgary, Vancouver and Toronto in seeing the pace of sales slow sharply with rising prices and fears of a recession on the horizon. Big increases in interest rates, such as the full percentage increase in July, could put more pressure on these markets.

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On the other hand, the Quebec City housing market remained strong, with sales up one percent compared to last year. The Federation of Quebec Brokers said this was the second straight month of gains, but warned that there were signs that this market was also slowing.

“Even if this increase must be confirmed in August and September before we can talk about it being a trend, it is a precursor to a market slowdown and much weaker price growth or stabilization over the next few months, which is consistent with the sharp rise in interest rates,” Brandt said. What we have seen since the beginning of spring.

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