Real Estate in Quebec in second quarter of 2013; QFREB Barometer

Residential Sales in Québec: 

Downward Trend Continues for Fourth Consecutive Quarter

In the second quarter of 2013, 23,079 residential sales transactions
were concluded through the Centris® system in the province of
Québec. This represents a 7 per cent decrease compared to the
same period last year and the fourth consecutive quarterly drop in
The downward trend in sales coincides with the most recent
tightening of mortgage rules, which came into force in July 2012 and
limit the maximum amortization period for new insured mortgages to
25 years, rather than 30 years. Apart from these new measures, the
economic situation was favourable to the real estate market: in the
past year, more than 47,000 jobs were created across the province
and posted mortgage rates for a five-year term decreased slightly
yet again in March to reach 5.14 per cent, a sixty-year low.
Several Agglomerations Bucked This Trend
Despite the province-wide slowdown in sales, 13 of the
21 agglomerations analyzed registered an increase in sales in
the second quarter of 2013. The most notable increases were in
the agglomerations of Victoriaville (+28 per cent), Mont-Tremblant
(+26 per cent), Rivière-du-Loup (+19 per cent), Saint-Adèle
(+13 per cent), Shawinigan (+9 per cent) and Drummondville
(+8 per cent). Among the eight agglomerations that registered
a drop in sales, the decreases were generally quite low with the
exceptions of Sept-Îles (-40 per cent), Rimouski (-25 per cent) and
Rouyn-Noranda (-12 per cent).
The slowdown in sales was primarily felt in the Census Metropolitan
Areas (CMAs). The CMAs of Saguenay, Québec City and Trois-
Rivières were particularly affected, with respective decreases of 15,
14 and 13 per cent. In the Montréal CMA, which accounts for more
than half of the province’s transactions, the decrease in sales was
approximately 9 per cent, while in the Gatineau CMA sales fell by
7 per cent. Sherbrooke was the only CMA to register an increase in
sales (+4 per cent).
No Doubt About the Direction of Active Listings
The trend regarding the number of listings in the Centris® system
is much clearer. In the second quarter of 2013, there were more
properties for sale in most of the province’s urban centres compared
to the second quarter of last year. This was primarily the case in
the Gatineau (+22 per cent), Québec City (+21 per cent) and
Saguenay (+20 per cent) CMAs. The increase in the number
of active listings was also significant in the agglomerations of
Rouyn-Noranda (+80 per cent) and Sept-Îles (+84 per cent). Across
the province, the number of active listings increased by 10 per cent
in the second quarter of the year as compared to the second quarter
of 2012. This upward trend is well entrenched, as it was the twelfth
consecutive quarterly increase in supply.
Prices Stabilize
In a context where sales are decreasing and the number of
properties on the market is increasing, it is not surprising to see
that pressure on prices is easing. The median price of single-family
homes in Québec stood at $230,000 in the second quarter of 2013,
only $1,000 more than in the second quarter of last year and an
increase of barely 0.4 per cent.
The median price of single-family homes remained stable compared
to the second quarter of last year in many of the province’s urban
centres, such as the CMAs of Gatineau and Trois-Rivières, as well
as the agglomerations of Granby, Rimouski and Thetford Mines.
In urban centres where prices did increase, price growth was
often minimal. This was the case in the Montréal (+2 per cent)
and Saguenay (+1 per cent) CMAs, and in the agglomerations of
Baie-Comeau (+2 per cent), Joliette (+2 per cent) and Salaberry-de-
Valleyfield (+2 per cent).
Furthermore, a growing number of urban centres are registering
price decreases as compared to last year. Prices slipped moderately
in some areas, such as the Sherbrooke CMA (-2 per cent) and
the agglomerations of Saint-Jean-sur-Richelieu (-2 per cent)
and Victoriaville (-2 per cent), but were more considerable in the
agglomerations of Sept-Îles (-18 per cent), Val-d’Or (-11 per cent),
Rivière-du-Loup (-9 per cent), Shawinigan (-5 per cent), Sorel-
Tracy (-6 per cent), Sainte-Agathe-des-Monts (-6 per cent), Mont-
Tremblant (-7 per cent), Saint-Adèle (-7 per cent) and Saint-Sauveur
(-11 per cent). Note that these results should always be interpreted
with caution due to the high volatility that can characterize quarterly
prices in small agglomerations. In the case of Val-d’Or in particular,
there is an inconsistency between the drop in prices and market
conditions that clearly favour sellers. However, in agglomerations in
the Laurentides, price decreases are probably a reflection of market
conditions that heavily favour buyers1.
Sellers Must Wait a Little Longer
The relaxing of the real estate market has another consequence:
properties stay on the market for a longer period of time.
The average selling time across the province, for all property
categories combined, increased from 90 days in the second quarter
of last year to 102 days in the second quarter of this year. At one
extreme you have the Gatineau CMA and the agglomeration of
Val-d’Or, where the average selling time was the shortest in
the province at 75 days, and at the other extreme you have the
agglomeration of Mont-Tremblant, where the average selling
time rose to 226 days. Significant increases in selling times were
observed in the agglomerations of Joliette, Sept-Îles, Rivière-du-
Loup and Drummondville, with an average of 135, 111, 170 and
120 days, respectively.

Source:  QFREB Barometer

Massood Hashemi

Massood Hashemi

Residential Real Estate Broker
CENTURY 21 Immo-Plus
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