Heat wave or not, the real estate fever that hit the market for chalets and second homes two years ago is currently experiencing a serious cold snap.
“For the past few weeks, visits on weekends with the opening of multiple purchase offers on Tuesdays have no longer been part of our reality,” admits Michel Naud, broker for the Engel & Völkers agency in Mont-Tremblant.
“Buyers are more composed, visits less frantic and there are fewer overbids. 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 Laurentians, Lanaudière and the Eastern Townships, which have always been highly coveted by vacationers, are currently experiencing the same swing of the pendulum as the rest of the province, maintains the director of the Market Analysis Service of the Professional Association of Quebec Real Estate Brokers, Charles Brant.
The successive increases in the Bank of Canada’s key rate since the spring, combined with the resumption of international travel and the public’s concern about inflation, have had the effect of drastically curbing the momentum of many investors.
“After two years of the pandemic, it’s like things are slowly getting back to normal,” explains Mr. Brant. The market remains in favor of sellers, but there is a sharp drop in transactions and an increase in listings. »
31% drop 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 by 31% in June, compared to the same period a year earlier.
It is in this changing context that a couple of retirees, formed by Georges Melançon and Céline Bernier, decided this spring to divest themselves of their residence in Austin, in the Eastern Townships. After living there for 15 years, the couple are 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 house 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. Karine Bonin, real estate broker associated with Re/Max in Magog, confirms the slowdown.
The return of negotiations?
Everywhere, registrations are on the rise, the number of transactions is falling…
And even if, for the time being, prices are still holding up, she observes a change in the attitude of buyers.
“Recourse to one-upmanship is no longer automatic. Even that, more and more, some negotiate and no longer hesitate to present offers lower than the displayed price [5 à 10 %]something we haven’t seen for years,” she says.
Put into perspective…
For some sellers, this new reality can be received harshly. Does she worry Mr. Melançon? Not really. On the contrary, he claims to be sure that the price established for his home reflects the current market and specifies that his sale is not made in an emergency context.
“If it’s not this year, it will be next year”, he says, before adding the following relativistic reflection: “don’t forget that whoever agrees to sell for less today should in principle also be able to buy back for less. »
The ebb is accelerating in the metropolis and the national capital
The province’s real estate markets, like those in the greater Montreal and Quebec regions, continue to show signs of an accelerated slowdown.
The latest data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ) shows a 15% drop in the number of transactions in July, compared to the same month in 2021.
If prices continue to climb in Quebec – by around 12% on average – the number of residence listings for sale is 13% higher than it was on the same date last year. A cocktail that could announce a possible slowdown, or even stagnation in the growth of real estate prices here.
“In continuity with what was recorded in June, the change in market dynamics is clearly confirmed,” said Charles Brant, Director of the APCIQ’s Market Analysis Department. The magnitude of the rise in interest rates, in just 4 months, accelerated the market slowdown. »
Free fall in Montreal and Laval
The greater Montreal area experienced an 18% drop in transactions in July, compared to last year, and a 28% increase in listings during the same period. However, prices continue to climb: by 10% in July, against 17% since the beginning of the year.
The cities of Montreal and Laval are showing the most marked signs of a slowdown in the region with sales volumes down 29% compared to July 2021. Active listings are up 18% (including 54% in single-family) in Montreal and 13% in Laval.
Signs also in Quebec
The metropolitan region of Quebec presents a portrait that differs in appearance from the rest of Quebec. It is one of the few markets in the country to record an increase in sales compared to last year.
Its sales have increased by 1% and its listings are 15% lower than last year. However, explains the APCIQ, this activity is partly explained by the absorption of an increasing inventory of properties for this period of the year.
“Although this rise will need to be confirmed in August and September to speak of a trend, it is a precursor to a slowdown in the market and much weaker price growth or stabilization in the coming months,” supports Mr. Brant.