Real estate statistics for the 4th quarter of 2023: More options but higher prices
Published on February 28, 2024
After some difficult months, buyers can finally see encouraging signs, starting with an increase in the property inventory. But despite that, the rise in median prices continues, benefiting sellers.
Read the Real Estate Minute for the 3rd quarter of 2023 to see past statistics.
During the months of October to December, sellers maintained the advantage and the inventory rose, despite the fact that the 3rd quarter had seemed to suggest the market was returning to an equilibrium.
Here are the statistics for the 4th quarter of 2023 and our forecast of what’s coming in the next quarter: The Real Estate Minute.
Contents:
- Increasing offer and rising inventory
- In Gatineau, properties are rare
- Montréal market slows down
- Québec City buyers take action
- Saguenay prices rise
- Sherbrooke’s inventory grows rapidly
- Trois-Rivières: the most robust market
- Trend analysis and look ahead
Increasing offer and rising inventory
In 2023, the new residential properties available to buyers were scarce, with a decrease of about 6% compared to the previous year1 However some encouraging signs appeared. For the first time in several quarters, the number of new listings on the market rose 6%.2 This unexpected shift implies that property owners decided to take action by putting their home up for sale.
Over the course of the year, successive key interest rate hikes dampened the enthusiasm of many potential buyers. This led to a significant drop in the number of real estate transactions: 14% fewer in 2023 than in 2022.3
Fortunately, the stabilization of the key interest rate since July 12, 2023, helped curb the drop in transactions in Q4, which was much less steep (3%) compared to the year before.4
Evolution of the key interest rate
The increase in the number of new properties on the market made the inventory rise in the major real estate sites in Q4 for the first time of the year.5 The inventory increased 9% compared to Q3 and compared to Q4 of the previous year.6
This rise in the inventory still remains well below the historical offering, thereby maintaining the trend of a buyer’s market over the whole year. This renewed vigour helped keep the median prices higher than in the previous year, regardless of period or type of property.7
Selling times experienced a moderate rise during the whole year. It took about 2 weeks more to finalize a transaction in 2023 than in 2022. The times recorded in Q4 were within the yearly average range.8
In Gatineau, properties are rare
In the Gatineau census metropolitan area (CMA), there was no marked increase in the number of new listings and sales in 2023.9 Despite the lower number of transactions, the scarcity of new listings kept the inventory low. In Q4 it only rose 4% compared to the same quarter in 2022, while the average provincial increase was 10%.9
Thus buyers there found themselves in a tight situation: with few properties on offer, sellers were in a position of power.
Higher mortgage rates put an end to the increase in median prices in this CMA, which is the most expensive after Montréal. There was an overall decrease of 3% compared to the year 2022 for single-family homes and co-owned properties.10 The fourth quarter seems to have maintained these median prices in the same order of magnitude, which suggests some stabilization of selling prices.10
In light of this information, it’s not surprising to see that overbidding is occurring less and less often: 12% of sales on DuProprio.com were concluded above asking, which is a little lower than the provincial average of 15%.11 Selling times stayed low the whole year in Gatineau and were among the fastest in the province, 42 days on average for 2023.12
Montréal market slows down
The softening of Montréal’s market continued, at a steeper rate than in the other metropolitan areas. While the market continued to be generally advantageous to sellers, the return to balance is further ahead than in other places.
Quarter after quarter, buyers have had more selection available to them. The yearly average jumped 26% over 2022, which is a markedly higher increase than the provincial average.13 The expansion in the number of properties available can mainly be attributed to the drop in real estate transactions by 15% compared to 2022.13 This substantial decline helped grow the inventory despite the reduction in new properties on the market.13
More homeowners seem to have held on to their real estate, reducing the supply of new properties by an average of 9% for the whole year.13 It is interesting to note however that the opposite trend was observed in Q4 of 2023, with a 3% increase in new properties compared to the same quarter of the previous year. 13
Montréal, the most expensive metropolitan area in the province, saw a 2% decrease in the median price of single-family homes for 2023 as a whole.14 However, there was a 5% increase in the median value in Q4, relative to the same period in 2022.14
Overbidding was less common than previously. The number of owners who sold their home on DuProprio.com above asking was 14% in Q4 of 2023, which was the same as the provincial average.15
It took 52 days on average for a single-family home to find a buyer in Montréal in 2023, which was still slightly faster than in the rest of the province overall.16
Québec City buyers take action
The Québec CMA market offered sellers some favourable conditions in 2023.
The number of properties available on the major sites rose slightly, and then dropped by 3% in Q4, compared to the same quarter in 2022.17 This leads us to believe that the market will lean more in favour of sellers. This shift can be explained by the course of transactions in the second half of the year: sales increased 12% and 6% in Q3 and Q4, respectively, which reduced the inventory considerably.17 The number of new properties on offer rose 3% in Q4 but this did not meet the demand from buyers.17
Against this backdrop in which the inventory struggles to increase and the market remains strong, the median prices have stayed higher than they were in Q4 of 2022.18 What’s more, 18% of the owners who used DuProprio.com received more than their list price.19
Selling times in Québec remained shorter than in the province overall, at 51 days for single-family homes in 2023.20 It is also noteworthy that 37% of the residential transactions carried out thanks to DuProprio took place within 30 days of their being put on the market.20
Saguenay prices rise
Over 2023, the Saguenay CMA continued to offer good results to sellers.
The offer rose for 3 consecutive quarters, but buyers also benefited from it, especially in Q4, with a 11% rise in the number of transactions recorded in that period.21 With this hike in the number of properties sold, the inventory only rose 2% in the last quarter.21
Median selling prices continued to catch up to the provincial average. The increases for single-family homes and co-owned properties were the highest in the province.22 However, despite these substantial gains in terms of price, the rate of overbidding was no higher than anywhere else: 15% of transactions that took place on DuProprio.com in 2023 were above market.23
While the indicators sketch the picture of a particularly robust market, the transactions occurred within the average times, i.e., 53 days for single-family homes.24 It’s interesting to shine a light on the fact that 38% of transactions carried out with the help of DuProprio took place in under 30 days in 2023.24
Sherbrooke’s inventory grows rapidly
Indicators show that this CMA was a seller’s market all year long. However, the market slowed down more suddenly in 2023 than in 2022.
The inventory of properties there rose significantly compared to the other CMAs. Buyers had access to an inventory that was 30% higher than in 2022,25 and this increase was maintained throughout the year. This hike is largely explained by the 17% drop in the number of transactions in 2023.25 As for new listings, they experienced a dramatic rise of 20%.25
Despite the radical hike in the inventory, coupled with a market slowdown, the median selling prices didn’t dip, but kept climbing, as compared to the previous year.26 One in five transactions done with DuProprio’s assistance took place over asking, which was higher than the provincial index.27
Selling times were a little faster than the provincial average in 2023 , at 50 days for single-family homes.28 One-third of DuProprio clients reported their property selling within the first month of being put on the market.28
Trois-Rivières: the most robust market
As was the case throughout 2023, the indicators for Q4 showed the Trois-Rivières CMA to be the strongest market in the province.
This market has been highly favourable to sellers for a long while. The inventory of properties available remains very low, much to the chagrin of buyers. It declined 9% in Q4, compared to the same quarter in 2022.29 This is attributable to many property owners delaying their plans to sell or deciding to keep their property. The number of new listings fell 8% in 2023 and 13% in Q4. Consequently, the number of transactions also declined—by 17% for the year 2023, and 24% in Q4.29
The low property inventory and lack of new listings on the market resulted in a rise in the median selling price of single-family homes, by over 8% compared to the previous year during the final quarter.30 The price of multiplexes also rose sharply, by 9% for the year as compared to 2022, and an even sharper rise of 24% in Q4 of 2023.30
It was in the Trois-Rivières CMA that the largest percentage of DuProprio clients (nearly 25%) sold above asking. The amount they received was 4% higher than the last listed price, which contributed to the increase in median selling prices.31
It is no surprise then that selling times in this area were among the fastest in the province. It only took an average of 37 days to sell a single-family home there in 2023.32
Trend analysis and look ahead
A new trend began to emerge in the final months of 2023. While its intensity varied by CMA, an increase in properties going on the market was seen across Quebec.33
This has two possible impacts: it may increase the number of transactions or inflate the inventory available. If this second scenario takes place, the market should lean back toward the equilibrium buyers have been waiting for.
The results of the first months of 2024 will tell us more about how it will play out. New listings are growing sharply (23%) compared to 2023, 34 which gives aspiring owners more chances of achieving their ownership dreams. It does appear that buyers are taking advantage of the situation, since the number of transactions reported rose 11%.34 The inventory has continued to grow since the end of last year; it was 5% higher at the end of January 2024 than in December 2023.34
With these developments, and the announcement that the key interest rate would stay the same, the real estate market is highly interesting, for both sellers and buyers!
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