Condominium Construction Must Slow in Montréal and Québec City

According to a report published by Desjardins Economic Studies, the construction of new condominiums must slow in the Montréal and Québec City Metropolitan Areas in order to make it easier to liquidate new projects. The study indicates that even though there is already a slight surplus in the Québec City condominium market, condo starts increased by 30 per cent in 2012 and close to 1,000 new units are currently unoccupied. In Montréal, if the trend continues, the condominium market will also head toward a slight surplus, giving buyers the upper hand in price negotiations. Desjardins predicts that price increases for condominiums will slow to less than 2 per cent in 2013 and may even decrease in some areas. This cautionary note comes at a time when the financial institution points out that home sales have decreased since the entry into force of the most recent tightening of mortgage rules last summer and the decrease is most pronounced for condominiums, which attract a large number of first-time buyers. Despite this, there is not expected to be a widespread decrease in residential real estate prices in Québec, according to the study’s authors, as condominiums only account for 20 per cent of provincial sales (30 per cent in Montréal and 24 per cent in Québec City). The market is dominated by single-family homes, for which there remains a shortage and for which price growth is still around 3 per cent. Click here to read the report

Amir Sam

Amir Sam

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