SALE TIME HAS NOT ARRIVED YET!
Residential property sales fell 1% over the summer across Canada. For now, prices remain stable in some regions while they continue to climb in others. Buyers are not seeing large clearance sales or discounts.
National home sales are down a slight 1% in August 2022, new statistics released by the Canadian Real Estate Association (CREA) show, while the number of newly listed properties fell 5.4%, except in Montreal, where new listings barely budged from July to August.
In Quebec, 6,406 properties were sold in July and 5,929 in August. When we compare over one year, from August 2021 to August 2022, sales have fallen by 15%
It is not easy to draw conclusions with the month of August. Traditionally, the trend is downward in active listings, ”explains Charles Brant, director of the market analysis service at the Association professionnelle des courtiers immobiliers du Québec (APCIQ) over the phone.
“It is possible that the month of August was not very representative or exaggerated the trend a little, ” he continues, “We will see what will happen in September. Perhaps the market will stabilize a little in September before continuing to decline over the next few months in terms of sales and prices”
SALE AT THIS TIME
By comparing the prices recorded in August 2021 to those of August 2022, we observe a 9% increase in the prices of single-family homes in Quebec. This increase is attributable to the peak in prices recorded in May when buyers wanted to acquire a property before the rise in interest rates and before July 1st.
If, in 2021, the price increase amounted to 18.9%, the CREA envisages for 2022 an increase of 16.8% and a slight increase of 0.5% in 2023.
Overall, there was a small 3.9% average decrease across all of Canada in August …NO SALE AT THIS TIME
Charles Brant says the overbidding peaked in the first quarter of 2022, creating strong demand pressure in the market, strong price growth, he says, “which was almost speculative.”
Currently, there is a sharp drop in the proportion of sales concluded as a result of an overbidding process. Fewer and fewer homes are selling for more than the listed price.
It shows that the price acceleration or overbidding is over and that eventually it opens the door to more negotiation and more sales that are made after a conditional offer. We are returning to a certain normality.
The full impact of rising interest rates, however, is not visible. The next rise, although more moderate, should continue to change the market picture.
“The market should not collapse, because there is a structural supply deficit, there is not enough construction and the economic health of households is still quite good,” says Charles Brant. The shock of the rate hike could be partly absorbed. »
A recession and a rise in the unemployment rate could, however, change the situation.