Rebalancing of Montreal Area Real Estate Market in 2013
Rebalancing of Montreal Area Real Estate Market in 2013LE-DES-SOEURS, QUEBEC--(Marketwired - Jan. 16, 2014) - The Greater Montréal Real Estate Board (GMREB) has released its residential sales statistics for the Montréal Census Metropolitan Area (CMA), based on the real estate brokers' Centris® provincial database. In total, 36,522 residential sales were concluded in 2013, which represents a 9 per cent decrease compared to 2012. This was the third consecutive annual decrease in sales, and the first time since 2006 that the level of sales fell below 40,000 units.
In the Montréal CMA, the start of 2013 continued from where the second half of 2012 left off, with a 19 per cent decrease in sales in the first quarter and a 10 per cent decrease in the second quarter. The Montréal area real estate market then stabilized in the second half of the year, with a slight 2 per cent increase in sales in the third quarter and a small decrease of 2 per cent in the last quarter.
"The effects of the more restrictive mortgage rules that came into effect in July 2012 continued to be felt in 2013," said Diane Ménard, Vice-President of the GMREB Board of Directors and spokesperson for the Québec Federation of Real Estate Boards (QFREB) for the Montréal area. "All three property categories were affected by the slowdown," she added. Sales of single-family homes fell by 8 per cent while condominium sales decreased by 9 per cent. Plex sales registered the largest decrease compared to 2012, at 11 per cent.
Geographically, the number of transactions decreased by 10 per cent on the Island of Montréal and by 11 per cent in the Vaudreuil-Soulanges area in 2013. The South Shore and North Shore registered smaller decreases in sales, at -6 and -7 per cent, respectively, compared to 2012. Finally, the largest decrease in sales was in Laval, where the number of transactions fell by 14 per cent as compared to 2012.
The number of properties for sale increased (+13 per cent) for a third consecutive year in the Montréal area. Once again, condominiums (+22 per cent) registered the largest increase in supply, while the increases were less pronounced for plexes (+7 per cent) and single-family homes (+8 per cent).
"The Montréal real estate market, which was generally a seller's market, underwent a rebalancing in 2013, caused by a slowdown in sales and an increase in supply," said Paul Cardinal, Manager of the Market Analysis Department at the Québec Federation of Real Estate Boards. "The relaxing of market conditions was more pronounced for condominiums: after becoming balanced in 2012, conditions for this property category shifted to a buyer's market in 2013," he added.
In fact, price increases continued to slow in 2013 in the Montréal area. Across the CMA, the median price of single-family homes and plexes increased by 2 per cent, while that of condominiums remained stable compared to 2012. In all of these cases, the increases were smaller than those observed in recent years.
Soft Landing for Province's Real Estate Market in 2013
The Québec Federation of Real Estate Boards (QFREB) has released its residential sales statistics for the province of Québec, based on the real estate brokers' Centris® provincial database. In total, 71,265 residential sales were concluded in 2013, which represents an 8 per cent decrease compared to 2012. Single-family homes, which was the only property category to register an increase in sales in 2012, posted the smallest decrease in sales in 2013, at -7 per cent (50,082 transactions). Plex sales fell by 9 per cent with 6,015 transactions, while condominium sales took the largest tumble in 2013, falling by 10 per cent (14,788 transactions) compared to 2012.
The vast majority of Québec's Census Metropolitan Areas (CMAs) and agglomerations finished the year with fewer sales than in 2012. Among the CMAs, only Sherbrooke performed better than the provincial average, with a 7 per cent decrease in sales. In contrast, the Saguenay CMA, which registered the second-best performance in 2012, posted the largest decrease in sales in 2013 (-18 per cent). Most of the province's agglomerations registered a drop in sales in 2013, varying between -1 per cent in Sainte-Agathe and -27 per cent in Sept-Îles. Among the few agglomerations that registered an increase in sales in 2013, Mont-Laurier performed well with a 23 per cent increase in sales, its second best annual result. In general, activity outside of the metropolitan areas had a less significant slowdown in sales (-4 per cent) as compared to all of the province's CMAs combined (-10 per cent), which reflects the smaller decreases in sales in the agglomerations.
For a third consecutive year, the number of active listings rose sharply in Québec in 2013, as an average of close to 71,000 residential properties were for sale by a real estate broker, a 9 per cent jump compared to 2012. "With the increase in the number of homes for sale, market conditions continued to relax in many areas of the province which, in general, translated into much more moderate price increases than in 2012," explained Paul Cardinal, Manager of the QFREB's Market Analysis Department.
Half of all single-family homes were sold at a price higher than $225,000, which is stable compared to 2012. The median price of condominiums and plexes also remained relatively stable in 2013, as both property categories registered a slight increase of 1 per cent. Four of the province's six Census Metropolitan Areas (CMAs) continued to post increases in the median price of single-family homes in 2013: Montréal (+2 per cent), Sherbrooke (+2 per cent), Québec City (+3 per cent) and Saguenay (+3 per cent). However, these increases are smaller than those registered in 2012. Finally, the median price of single-family homes remained stable in Gatineau and decreased slightly in Trois-Rivières (-1 per cent).
"The effects of the more restrictive mortgage insurance rules that came into effect in 2012, which reduce the maximum amortization period for new insured mortgages to 25 years, continued to be felt on the real estate market in 2013," said Mr. Cardinal. "This has led to a rebalancing of the province's real estate market and has resulted in more moderate price increases," he explained.
About the Greater Montréal Real Estate Board
The Greater Montréal Real Estate Board is a non-profit organization with close to 10,000 members: real estate brokers. Its mission is to actively promote and protect its members' professional and business interests in order for them to successfully meet their business objectives.
Centris.ca is Québec's real estate industry website for consumers, grouping all properties for sale by a real estate broker under the same address. Visit Centris.ca to obtain more information and quarterly statistics for the province of Québec.
About the Québec Federation of Real Estate Boards
The Québec Federation of Real Estate Boards is a non-profit organization composed of Québec's 12 real estate boards and the close to 14,000 real estate brokers who are their members. Its mission is to promote and protect the interests of Québec's real estate industry so that the boards and their members can successfully meet their business objectives.
For more information about the Centris® statistics for each of the province's regions, don't miss the upcoming publication of the QFREB Barometer.
Source: Market Wired