Review of the 2020 resale market and forecasts for 2021
Montreal, December 16, 2020 – The Quebec Professional Association of Real Estate Brokers (QPAREB) presents its review of 2020 following the impact of COVID-19, highlights of a new survey on buying and selling intentions, and its 2021 forecasts for the residential real estate market in the Montreal Census Metropolitan Area (CMA), the Quebec City CMA and the province of Quebec.
Highlights: Review of the 2020 resale market
- Record-setting sales in 2020, with 110,000 projected transactions;
- A 15 per cent increase in sales and a 29 per cent decrease in listings, all property categories combined;
- Significant increase in single-family home sales (+17 per cent) from January to November;
- Sales in non-CMAs increased by 28 per cent from January to November while sales in CMAs increased by 10 per cent, which demonstrates an acceleration in movement to areas outside the main cities;
- New price record expected for 2020 in Quebec of $295,000 for single-family homes, a 13 per cent jump compared to last year, and cumulative nominal growth of 212 per cent since the year 2000;
- Property price is no longer the primary criterion for first-time buyers;
- Condominiums remain in high demand in peripheral areas but are losing their appeal in areas that are most dense / nearest to workplaces;
- The new Réseau express métropolitain (REM) project towards the east end of Montreal will have an upward impact on sales in the areas of eastern Montreal;
- Increased movement to the periphery of the Island of Montreal;
- The popularity of teleworking is a catalyst that has a major impact, as it applies to all of Quebec.
2020 REVEW | PORTRAIT OF THE PROVINCE OF QUEBEC
Although 2019 was an exceptional year, 2020 reached an all-time high in terms of residential sales with a projection of 110,000 transactions. Despite a sudden 75 per cent drop in sales in April due to the confinement measures, the strong rebound in June and July allowed Quebec’s real estate market to bounce back sharply.
COVID-19 brings a wind of change to the 2020 resale market
According to a Léger survey on buying and selling intentions, young households in the 18-34 age group are proportionately more likely to have experienced a negative financial impact (44 per cent) in 2020, which affected access to homeownership. The pandemic, and especially the arrival of teleworking, has, among other things, upended the behaviour of first-time buyers and shifted their needs towards greater comfort, a better quality of life and more outdoor space – needs that can be met in areas that are on the periphery of metropolitan areas. “Property prices are no longer the primary selection criterion for first-time buyers who until now were linked to the need to be close to the workplace,” said Charles Brant, director of market analysis at the QPAREB.
At the same time, Mr. Brant adds that “experienced buyers are in a better financial position to take advantage of real estate market opportunities and move up in product and price. They are proportionately more active in the market, which translates into a shift in the market towards the higher price ranges.” Indeed, there has been an increase in property transactions over $700,000, especially in the agglomerations that are on the periphery of the Island of Montreal. The proportion of single-family home sales above $1,000,000 has also doubled everywhere in the Montreal CMA.
Because proximity to the workplace has becomes less important, there has been a marked interest in second homes, which has created greater attraction for periphery areas and resort areas. “We are seeing very strong growth in certain resort areas, almost doubling the sales level of 2019 in some cases, which reflects this popularity for second homes,” said Mr. Brant.
Highlights: 2021 forecasts
- The number of sales will decrease, but activity will remain strong;
- Market conditions will remain favourable to sellers although an increase in properties put back on the market is expected with the end of government support programs and the end of mortgage deferrals from banks.
- The very low number of listings in several markets, particularly in the agglomerations on the periphery of the Montreal CMA, will limit sales growth;
- Prices will continue to experience upward pressure, although much more moderate than in 2020;
- Overheating and overbidding conditions will ease in the Montreal CMA, offering more comfort to buyers, thanks to an easing of multiple-offer situations, particularly on the Island of Montreal (condominium and plex);
- Single-family homes will continue to be the most sought-after property category;
- The market for second homes will remain active despite the shortage of supply;
- The market for intergenerational properties will continue to be tight despite competition with the plex market in the suburbs of Montreal.
- Quebec City will continue to see strong activity and further tightening of market conditions in favour of sellers.
According to Mr. Brant, the real estate market will catch its breath in 2021. He expects that transactions in Quebec will decrease by 11 per cent. “After phenomenal sales in 2020, we will return to a more normal sales level, with market conditions that are still favourable to sellers.” Plexes will continue to attract investors in areas that are on the periphery of the Island of Montreal and Quebec City, thanks to more attractive capitalization rates. As for condominiums, market conditions will continue to be favourable to sellers (except in certain central areas). We expect condominium sales to decrease and listings to increase on the Island of Montreal.
2021 FORECASTS | PROVINCE OF QUEBEC
2021 FORECASTS | MONTREAL CMA
2021 FORECASTS | QUEBEC CITY CMA
About the Quebec Professional Association of Real Estate Brokers
The Quebec Professional Association of Real Estate Brokers (QPAREB) is a non-profit association that brings together more than 13,000 real estate brokers and agencies. It is responsible for promoting and defending their interests while taking into account the issues facing the profession and the various professional and regional realities of its members. The QPAREB is also an important player in many real estate dossiers, including the implementation of measures that promote homeownership. The Association reports on Quebec’s residential real estate market statistics, provides training, tools and services relating to real estate, and facilitates the collection, dissemination and exchange of information. The QPAREB is headquartered in Quebec City and has its administrative offices in Montreal. It has two subsidiaries: Centris Inc. and the Collège de l’immobilier du Québec. Follow its activities at qpareb.ca or via its social media pages: Facebook, LinkedIn, Twitter and Instagram.
Société Centris provides real estate industry stakeholders with access to real estate data and a wide range of technology tools. Centris tools are used by close to 14,000 real estate brokers, as well as other industry professionals. Centris also operates Centris.ca, the most visited real estate website in Quebec.
About the survey on buying and selling intentions
A survey on buying and selling intentions in the residential real estate sector was conducted in the fall of 2020, in collaboration with the Fonds immobilier de solidarité FTQ, the Société d’habitation du Québec (SHQ) and the Association des professionnels de la construction et de l’habitation du Québec (APCHQ. Learn more.
See the highlights (in French only).
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 Survey on buying and selling intentions in the real estate sector in Quebec (2020 edition), Léger.