Real estate statistics for the 2nd quarter of 2023: A slow, non-linear transition

In the last few quarters, everyone was saying the real estate market was returning to equilibrium, but we now see that the expected slowdown is not happening evenly or as fast as expected. In short, the market isn’t really operating much more slowly.

Read The Real Estate Minute for the 1st quarter of 2023 to see past statistics.

For the months of April to June, we clearly see conditions that are similar to those for the same quarter of 2022. This could be a sign that the market is improving, as compared to this year’s 1st quarter.

Here are the statistics for the 2nd quarter of 2023 and our forecast of what’s coming next, in The Real Estate Minute.

Contents:

• A surprisingly strong market
  • Increased sales
• Advantageous prices at the end of the quarter
• Market conditions reflected in selling times
• Stagnant inventory in the province
• Trend analysis and a look forward

A surprisingly strong market

The snapshot of this most recent quarter is similar to last year’s, particularly in terms of the ratio between properties sold and new property listings. In fact, this threshold, used to determine the market’s strength, is relatively similar to the one from the 2nd quarter of 2022.

According to CMHC’s Methodologies for the Housing Market Assessment, a ratio of over 55% characterizes a seller’s market, and one over 70% is an overheated market. Therefore, the 70% ratio in 2023’s 2nd quarter¹ means that the market was very advantageous for sellers.

Increased sales

While new listings were scarce in the 2nd quarter, the thing that really stands out is the number of properties sold. While there was a strong decline in sales from January to March (-32%²), the decrease was only 12% this last quarter compared to the same period in 2022.³ These interesting results were especially visible in the months of May and June, which only had drops of 7%⁴ and 9%⁵respectively.

In fact, in May, DuProprio recorded the highest number of properties reported sold on DuProprio.com by its clients across Quebec. A total of 1,049 owners reported having sold on DuProprio.com in May—the highest number in 12 months.⁶

Advantageous prices at the end of the quarter

While the market seemed to be stabilizing, a good percentage of sellers benefitted from the market conditions to get a better price for their real estate. In the land register, the median price for a single-family home was $398,789 for the province in June,⁷which is almost equal to the historical high of July 2022.⁸ And it’s even a 3% increase over the median price of June 2022.⁹

However, the situation varied from region to region. The census metropolitan area (CMA) of Saguenay experienced the highest rise, at 7%.¹⁰ The Montréal and Gatineau metropolitan areas however had lower median prices than last year for single-family homes. However, these prices were still higher than in the other months of 2023 to date.

Statistics for other property types were similar, such as multiplexes with 2 to 5 dwellings and condos. As for co-ownership properties, there was a slight decrease in the median price in Quebec (-1%) compared to the 2nd quarter of 2022,¹¹ influenced by the decreases recorded in Gatineau and Montréal. Condos in the metropolitan areas of Trois-Rivières (+8%),¹² Sherbrooke (+7%)¹³ and Saguenay (+7%)¹⁴ did well in terms of median prices during this last quarter.

For multiplexes, we observed a slight overall increase of 2% in the median price in the province, as compared to the 2nd quarter of 2022.¹⁵ However, the picture remained similar to that of condos. The indicators for Québec City, Saguenay and Trois-Rivières were in the green, while no variation in the median price was recorded for Sherbrooke in the same period.

Market conditions reflected in selling times

The favourable wind blowing over Quebec’s real estate market also had an impact on selling times. Thus, we saw slightly shorter selling times in the months of April to June than at the start of the year. This was especially the case in Gatineau, where sellers needed about 19 fewer days¹⁶ to sell their property than during the 1st quarter of 2023.

Stagnant inventory in the province

Because of the positive results in property sales and the reduction in the number of new listings appearing on the market, the inventory of residential properties, which had been increasing slowly, stopped rising in the year’s 2nd quarter. 

We even saw a slight decrease compared to the numbers for March 2023,¹⁷ as well as month to month over the quarter.

Trend analysis and a look forward

On July 12, the Bank of Canada raised its key interest rate 0.25 percentage points to try to curb inflation, which has been decreasing more slowly than anticipated. This key rate is now at 5%—an increase of 2.5 points since July 2022. This was the 10th increase since March 2022. The Bank does not exclude the possibility of another increase in the fall.

The resulting hike in mortgage rates could reduce some buyers’ capacity to qualify for a loan or to buy a higher-priced house. Therefore, we risk seeing a drop in demand.

This does not however mean that the real estate market will change drastically over the next quarter. While the previous hikes in the key interest rate have somewhat dampened the market, sellers are still operating in relatively favourable conditions. The number of properties on offer province-wide is still a bit low after this fairly active quarter.

Want to get monthly statistics between our more in-depth analyses? Check out the Quick Real Estate Minute.

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