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Forecasts for the real estate market in Quebec continue to be talked about these days.
With skyrocketing interest rates, a slowing market, and declining prices, it is difficult for buyers and sellers to know where to position themselves.
Is the market in favor of buyers or sellers? What can we expect from the real estate market for 2024 and 2025?
After analyzing various studies and publications from the CMHC, the Association des courtiers immobiliers du Québec, and government databases, we are ready to present you with the latest forecasts from the experts.
In this article, you will find a summary of the various findings made by various professionals regarding the real estate market in Quebec for the next two years. Since no one can predict the future, always take this information with a grain of salt.
How much should you expect to pay for a house in Quebec?
The median price of a house in Quebec is $400,000 at the start of 2023.
Obviously, depending on where you live, the price can be much higher (as is the case in Montreal), or lower.
According to the latest data published by the Professional Association of Real Estate Brokers of Quebec, the market in 2023 will experience a slight decline but is still stable.
In a report published at the beginning of 2023, Desjardins anticipated a 25% decrease in residential sales in Quebec in 2023. Desjardins also anticipates a general drop in prices of 17% by the end of 2023 compared to the April 2022 peak.
The year 2023 is already well underway, and experts expect a year-end similar to what we have already seen.
This means that 2023 will be marked by slight price declines in some regions, and stability in others.
We should not anticipate any increases in real estate values in 2023, except in certain exceptional sectors.
Real estate forecasts for 2023 are, therefore, under the sign of real estate austerity, with a drastic reduction in the number of sales, and a drop in values.
Between March 2022 and March 2023, prices fell 14% across Canada according to CMHC Chief Economist Bob Dugan. That being said, prices are still higher than at their pre-pandemic level.
While mortgage rates were extremely high in 2023, CMHC predicts a return to normal in 2024.
CMHC further believes that market activity may increase in 2024, which means that the number of sales should increase positively.
According to CMHC forecasts, the number of sales should be:
To make a comparison, the level of sales in 2022 was 498,269. We are, therefore, planning a gradual return to normal.
But what about prices?
According to the CMHC, house prices should start to rise again in 2024. It anticipates a 7.9% growth in prices in Canada, while a significant drop is expected in 2023. Buyers and owners can therefore expect that prices start to rise again in 2024.
Let’s look ahead to 2025. What should the real estate market look like at this time?
There are many uncertainties in 2023, in particular due to the incessant rate hikes of the Bank of Canada which is trying all available means to control inflation.
If inflation is curbed in 2023 or 2024, rates could once again decrease which would bring new excitement to the real estate market.
CMHC also forecasts a gradual increase in the median price of single-family homes in Canada in 2024 and 2025. Here are their forecasts:
In its 2023 mid-year forecast, CMHC said it forecast a 7.5% increase in house prices for 2025. It explains this forecast by the recovery of market strength, following an extremely difficult 2023. Inflation should come back under control, and rates could come back down in 2024.
Real estate is closely linked to the mortgage market and interest rates. When interest rates rise or are high, buyer demand is weak, which tends to lower prices.
In the 2023 market context, despite the high rates, the supply of properties is also limited, which means that the drop in prices is mitigated.
Interest rates significantly increased in Canada in 2022 and 2023. But what can we expect for the future until 2026?
No one seems to have the answer, and even the forecasts of top experts vary periodically.
According to the latest analyses, we will have to wait until 2024 to see the first cut in the country’s key rate.
Between January 2022 and June 2023, 9 interest rate increases took place, raising the key rate from 0.25% to 4.75%. The following graph shows its evolution during this period.
Source: Bank of Canada
Number of housing in construction
Source: Société canadienne d’hypothèques et de logements
With all the changes taking place in the real estate market and in the mortgage market, it is completely normal for you to be lost when it comes to the value of your home.
Yet, for the vast majority of people, their home is their biggest financial asset, and it’s important to know how much it is worth.
If you are thinking of selling your property in the near future, or if you wish to refinance it, you can have it appraised by professionals.
For an evaluation for the purpose of selling, you can request a free evaluation by a real estate broker by filling out our form.
For an appraisal for the purpose of refinancing, you can pay a licensed appraiser around $600-$900 for a full and official appraisal.
Would you like to get a free evaluation of your property? Here’s how!
No one can accurately predict what will happen to the real estate market in the coming years.
But one thing is certain – if you want to know the market value of your property, it is possible to do so for free.
Simply complete our free online form to have one of our partner real estate brokers assess the value of your home.
We have partners throughout Canada who can determine the value of your property if you wish to sell within the next year.
You will, therefore, be able to know what price you could obtain for your property in the context of the current market.
Buying or selling a property has a direct impact on your budget and your quality of life. This is why it is so important to have the right person assisting you. Use our service to find a real estate professionnal who truly meets your expectations.
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