2nd Quarter 2022 Real Estate Stats: Heading for a Changing Market in Quebec
Published on August 9, 2022
Quebec’s real estate market saw significant month-to-month variations this last quarter. While April’s market continued to be blazing hot, there was a slowdown in May and June. The second quarter of 2022 marked a turning point in trends prevailing in the province since 2020.
To prepare for what the market has in store for the rest of the year, let’s have a look at the statistical data from April to June 2022 in this Real Estate Minute.
Contents:
- A growing inventory (finally!)
- Rising selling prices… except in June
- Selling times still short, in the wake of a changing market
- Overbidding still very present, but losing steam
- Zoom in on metropolitan areas
- Our analysis of the trends and forecasts for the future
The state of the real estate market in early 2022
The real estate market in the first quarter of the year, as described in the previous Real Estate Minute, continued its momentum from 2021: reduced inventory, sharp increase in property prices, very short selling times. However, the April data hinted at a potential slowdown in the rise in selling prices and a stabilized supply of properties.
Property inventory: The number of properties on the market in Quebec was 28% lower than during the same period the previous year1.
Selling prices: The price of single-family homes rose by 21%, while condo and multiplex prices increased an average 19% compared to the median price for the same period in 2021, according to JLR’s Real Estate Radar2.
Overbidding: Nearly half of DuProprio clients reported selling for more than the last asking price on their listing during the first quarter of 20213.
Selling times: Selling times were at their shortest again. For single-family homes, the average selling time was only 48 days4. Condominiums sold in 51 days on average5 and multiplexes could expect to sell within 70 days6.
A growing inventory (finally!)
Although the number of properties on the market in the province remains historically low, there has been a month-to-month accumulation of inventory due to a smaller number of properties sold compared to number of properties listed in the last quarter. While new listings have remained at a level similar to the same period last year7, transactions fell 19%8. As a result of this, the inventory rose from an average of 26,586 properties for sale in the first quarter of 2022 to 31,327 in June9. While still very favourable to sellers, the market has begun trending increasingly toward balance.
Rising selling prices… except in June
Although on the rise, the still-low inventory of properties put pressure on the selling prices of all property types, mainly during the first two months of the period. JLR’s Real Estate Radar reported a 21.4% increase in the median price of single-family homes in Quebec compared to the same period in 202110, reaching $385,900 in the second quarter of 202211. However, the median price was $390,000 when only looking at the numbers for May, compared to $385,825 in June—a 1% dip12. The increase in the price of single-family homes was more pronounced in the most affordable markets in the province. For example, properties in regions such as Gatineau, Sherbrooke and Trois-Rivières caught up to prices throughout the quarter. Finally, only Baie-Comeau and its surrounding area saw a decrease in the median selling price of single-family homes during the second quarter13.
As for condos, the median price for the quarter was $365,000, an 18.9% increase compared to the same period in 202114. However, the median selling price fell in the province in June—to $360,000— compared to April and May, when this type of property fetched $365,000 and $376,440, respectively: a decrease of 4%15. Multiplexes followed the same trend in Quebec, with a median price 18.3% higher than in the same period in 202116, but with a 1.38% dip between May and June 2022, falling from $470,000 to $463,50017.
Selling times still short, in the wake of a changing market
The sign of a still-active real estate market in Quebec, the average selling time for residential properties was 12 days shorter in the second quarter of 2022, compared to the same period last year18. With properties taking 39 days to sell on average, the short selling times were motivated by an exceptional April and even beat the previous quarter’s excellent numbers19.
Why are the selling times still so short?
First, the first part of the quarter saw very short selling times in an exceptional market. Second, as the selling time is based only on when the sale becomes official, it does not necessarily take into account properties put on the market in the second part of the quarter. In a market in which fewer properties found buyers, their likely longer selling time will not be included in the period under analysis. Thus, the statistics on selling times are more of a look at the past, on properties that were indicated as sold during a given quarter, not those that could still be on the market today.
Overbidding still very present, but losing steam
While nearly half of DuProprio clients sold for more than asking in the first quarter of the year20, the percentage of properties that sold for higher than the last price listed remained the same in the second quarter, at 42%21. However, there has been a clear decline in overbidding, with only 34% of properties reported sold for more than asking in June22.
In the metropolitan areas, Sherbrooke had the highest percentage of transactions involving overbidding in the last quarter, with 60% of DuProprio clients reporting selling for more than the last asking price on their listing, up from 48% in the first quarter. Trois-Rivières and Gatineau’s numbers also stood out, with 59% and 57% overbidding, respectively, during the period23.
Zoom in on metropolitan areas
The trends observed in Quebec’s real estate market during the quarter did not affect all sectors the same way. Let’s have a look at the rise in prices, overbidding and selling times in the largest metropolitan areas:
Gatineau: growing
The Gatineau area saw a slight increase in property listings, although this did not prevent a rise in median prices in the sector. The price of single-family homes rose by more than 20% compared to the second quarter of 2021, reaching $451,05024. Buyer interest in condos and multiplexes was even more significant, with their median price rising 33.1% and 29.2%, respectively, compared to the same period in 202125. By the end of the second quarter, however, the condo market appeared to show signs of slowing, with their median price falling 3% in June compared to the previous month26. Finally, the Gatineau census metropolitan area had the shortest selling time: 23 days to sell a residential property27.
Montréal: trendsetting
While both the South Shore and the North Shore saw overbidding in more than 50% of property sales during the second quarter28, the initial boom on the Island of Montréal was the victim of its own success and is already showing signs of decline, with a decrease in the number of sales and a growing inventory. The metropolis is experiencing a more rapid trend toward balance than the rest of the province.
Saguenay: constant
With buyers still showing interest, prices in the Saguenay–Lac-Saint-Jean region continued to rise slowly but steadily. With 32% overbidding during the second quarter29 and a more than $20,000 rise in the median selling price of single-family homes between April and June (from $237,000 to $257,750)30, the region showed no signs of cooling during the period under review.
Trois-Rivières: holding
Activity in the Trois-Rivières area was fairly sustained in the second quarter, with 59% of DuProprio clients saying they sold for more than asking31. While the median price of single-family homes took a hit in May compared to April, June saw a rebound, bringing the price to close to $296,325, an increase of 31.5% compared to June 202132. Selling times were also shorter than the provincial average: residential properties in the Trois-Rivières area sold in only 30 days on average33.
Québec City: unflappable
In the Québec City area, inventory growth was slower and the sales momentum exerted pressure, leading to a sustained but reasonable price increase (13.8% for single-family homes compared to the same period in 2021 and around 9% for condos and multiplexes)34. The phenomenon of moderate overbidding, affecting 35% of properties sold on Duproprio.com in the second quarter35, and the better ratio between properties sold and new listings suggest that the coming months will be less tumultuous for this market than in other parts of the province, notably Montréal.
Sherbrooke: overheated (again)
Sherbrooke’s real estate market was especially tense in the second quarter with 60% of DuProprio clients reporting selling for higher than the last price listed36. Except for multiplexes, the median selling prices of residential properties rose from month to month, reaching $356,700 for single-family homes and $295,750 for condos37, corresponding to an increase of 27.4% and 35.7%, respectively, compared to the same period in 202138.
Our analysis of the trends and forecasts for the future
In focusing on the statistics for the second quarter of 2022, it would be easy to only see a new rise in prices and a percentage of overbidding equivalent to the previous quarter. However, a zoom in on the June data paints a very different picture across the province. See our overview of the data from June 2022 compared to the data from 2019.
What about the effects of the policy interest rate hike?
The 2.25-point increase in the policy interest rate since March helped cool the real estate market and is likely to be even more strongly felt in the third quarter of 2022. It is now more difficult to pre-qualify for a mortgage, which will eventually reduce the pool of potential buyers and thus ease the pressure exerted by demand on the supply of properties, whose numbers are already growing. Regions that were historically more affordable will potentially be the only ones to lag slightly behind the slowdown.
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