Risk Exists in Some Montréal and Québec City Areas for Certain Price Ranges, According to Desjardins Economic Studies
According to a recent study published by Desjardins Economic Studies, it is unlikely that the high pace of condominium construction in 2011 and in the first quarter of 2012 will lead to a general decrease in property prices in Québec. After analyzing the condominium resale, rental and new construction markets in the Montréal, Québec City and Gatineau Census Metropolitan Areas (CMAs), the study concluded that, overall, the risk of a construction surplus is low, although imbalances were observed in specific areas for very specific price ranges. In both the Québec City and Montréal CMAs, generally speaking, affordable condominiums designed primarily for first-time buyers continue to sell easily, while in the luxury market segment, the supply of condominiums available for sale is currently too high compared to demand. In terms of new constructions in the Montréal area, the current pace of condominium construction is not worrisome except in certain areas of Laval and the South Shore, as well as in the downtown and Nuns' Island area, where there is an oversupply of luxury condominiums. In the Québec City area, the risk of condominium overconstruction is virtually non-existent, except for a slight surplus of units priced over $400,000. Finally, in the Gatineau CMA, the condominium resale market remains very tight, indicating that demand is holding strong. Some even talk about a shortage of units priced lower than $300,000. As for new condominiums, the risk of overbuilding is very low.
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Source: © 2012 Québec Federation of Real Estate Boards.