Overview of the current real estate market
Published on July 29, 2022
Summary:
- The supply: the properties on the market
- The demand: the people looking for properties
- Selling time in Quebec
- The asking price for single-family homes
- Are bidding wars still a possibility?
- What does this mean?
While the pandemic sped up the rise in property prices, causing the real estate market to overheat, one would think that the most recent key policy rate hikes, and the resulting spike in mortgage interest rates, would cool buyers’ interest.
But don’t be mistaken. Although the real estate market has recently shown signs of slowing, it is still very favourable to sellers. Let’s have a look at the market statistics, focusing on the data from June 2022 compared to the same month in 2019.
The supply: the properties on the market
Since the beginning of 2022, there has been a month-to-month increase in the number of residential properties on the market. Even so, there were only 31,000 properties listed online this past June,[1] which is half the number of properties of this type on the market during the same period in 2019.[2]
The 2019 market was balanced, meaning that the supply (properties for sale) and the demand (interested buyers) were roughly equal. Today, the demand far exceeds the supply.
The demand: the people looking for properties
Although the interest rate jump has struck a blow to Quebecers looking to buy a new property in the near future, they are still actively searching. There were more than 4.6 million visits to the DuProprio website in June alone.[3] Although we saw higher peaks in visits to the site at the height of the pandemic, these figures are comparable to 2019[4] despite the fact that there were half as many residential properties for sale.
Selling time in Quebec
Still now, properties do not stay on the market for very long. The most recent residential property sales were concluded in 35 days[5] on average, nearly three times more quickly than in June of 2019, when the average sale took 96 days.[6] While selling times remain short, the number of properties that sell within the first few days of being listed online has fallen.[7]
The asking price for single-family homes
It is widely known that property prices have skyrocketed in Quebec over the last two years. This price increase, which has reached nearly 50%,[8] seems to be here to stay. There is currently no data to support a sharp price drop in Quebec despite the market changes on the horizon. According to JLR Land Title Solutions, the price of single-family homes fell by only 1% between May and June 2022,[9] reaching $385,825.[10]
Are bidding wars still a possibility?
Since the real estate market is still very active in the province, buyers are continuing to overbid. While nearly half of DuProprio clients reported selling for more than the last asking price on their listing during the first quarter of 2022,[11] now only around one in four are selling for higher than asking.[12]
Owners can no longer be sure they’ll receive multiple offers. Overbidding will depend on the type of property, its location, or the sales strategy or asking price.
What does this mean?
Although the real estate market still favours sellers, its trend towards balance means that buyers have a little more time and leeway to shop for a property. They may therefore be more cautious about getting into a bidding war.
Regardless of how the real estate market will change, it is important to remember that even if property prices come down in Quebec, the purchase of a new home would take place in a similar context. You would be selling your property for less, but would also be paying less for your new home.
To play your cards right in a changing market and get the best possible return on the time and money you invested in your property, you should try to recover the most you can during the sale. By choosing to sell without an intermediary, you can save or invest the commission you would have paid (in an RESP, TFSA, RRSP, etc.) or financially leverage the amount for personal projects. In addition to the satisfaction of having concluded the sale yourself, you’ll have more money in your pocket. Why deprive yourself of that?
Have more questions? Our team specialized in property sales is here to help.[13]
Planning to sell? Learn how DuProprio can support you and give your property visibility while leaving the commission in your pocket! Watch our informational video or contact us.
