Heat wave or not, the real estate fever that hit the chalet and second home market two years ago is currently experiencing a serious cold snap.
“Over the past few weeks, visits on weekends with multiple buyouts open every Tuesday are no longer part of our reality,” admits Michel Naud, a mediator at Engel & Völkers Agency in Mont-Tremblant.
“Buyers are more balanced, their visits are less crazy and there are fewer overorders. The interest remains, but there is no longer room for exaggeration, he says. Sellers may need to lower their expectations.”
Return of the pendulum
The family of Laurentians, Lanaudière and Eastern Townships, which have long been highly coveted by vacationers, are currently experiencing the same pendulum swing as the rest of the province, says Charles Brant, director of the Market Analysis Service at the Professional Association of Real Estate of Quebec Realtors, Charles Brant.
The consecutive increases in the Bank of Canada’s key interest rate since the spring, along with the resumption of international travel and public concern about inflation, have had the effect of holding back the momentum of many investors.
“After two years into the pandemic, it is as if things are slowly getting back to normal,” explains Mr Brant. The market is still in favor of sellers, but there is a sharp decline in transactions and an increase in listings. »
31% decrease in Saint-Sauveur
This is especially true in second home markets, historically the first to suffer in times of economic uncertainty. In Saint-Sauveur, for example, the number of transactions fell 31% in June, compared to the same period a year earlier.
In this changing context, two retirees, formed by Georges Melanson and Céline Bernier, decided this spring to strip themselves of their residence in Austin, in the eastern suburbs. After living there for 15 years, the couple is ready to move on.
“Essentially, we want to reduce our living space. With the arrival of our grandchildren, we want to devote less time to maintaining a home and land that has become too big for our needs.”
The catch is that their project comes even as the market shows signs of running out of steam. They are not alone in their case. Karen Bonin, a real estate broker affiliated with Re/Max in Magog, emphasizes the slowdown.
Everywhere, registrations are rising, the number of transactions is declining …
And even if prices continue to rise at the moment, they notice a change in the attitude of buyers.
“Resort to individual superiority is no longer automatic. Until this, some negotiate more and more and no longer hesitate to bid less than the price offered. [5 à 10 %]Something we haven’t seen in years.”
Take it into account…
For some sellers, this new reality can be received harshly. Do you worry Mr. Melanson? Not right. On the contrary, he claims to be sure that the price set for his home reflects the current market and specifies that his sale was not made in an emergency context.
“If not this year, then it will be next,” he says, before adding the following relative reversal: “Do not forget that he who agrees to sell at a lower price today should also be able in principle to buy back for less.”
The tides are accelerating in the capital and the national capital
The province’s real estate markets, such as those in the greater Montreal and Quebec regions, continue to show signs of an accelerating slowdown.
The latest data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ) shows a 15% decrease in the number of transactions in July, compared to the same month in 2021.
If prices continue to rise in Quebec – about 12% on average – the number of listings for accommodation for sale is 13% higher than it was on the same date last year. A cocktail could announce a possible slowdown or even stagnation in property price growth here.
“Continuing from what was reported in June, the change in market dynamics is clearly confirmed,” said Charles Brant, Director of Market Analysis at APCIQ. The magnitude of the hike in interest rates, in just 4 months, has accelerated the market slowdown. »
Free fall in Montreal and Laval
The Greater Montreal area saw an 18% drop in transactions in July, compared to a year ago, and a 28% increase in listings over the same period. However, prices continue to rise: by 10% in July, compared to 17% since the beginning of the year.
Montreal and Laval show the most visible signs of a slowdown in the region with sales volume down 29% compared to July 2021. Active listings are up 18% (including 54% in single households) in Montreal and 13% in Laval.
Signs also in Quebec
The metropolitan region of Quebec presents an image that differs in its appearance from the rest of the regions of Quebec. It is one of the few markets in the country that recorded an increase in sales compared to last year.
Its sales are up 1% and its listings are 15% less than last year. However, explains the APCIQ, this activity is explained in part by the absorption of a growing stock of characteristics for this period of the year.
“Although this rally should be confirmed in August and September to speak of a trend, it is a harbinger of a slowdown in the market and much weaker growth or price stability in the coming months,” Mr. Brandt supports.
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