L’Île-des-Sœurs, March 18, 2020 — While the stock market is in turmoil and financial uncertainty is setting in, the Quebec Professional Association of Real Estate Brokers (QPAREB) believes that the impact of the COVID-19 crisis on the real estate market will be temporary and will not have catastrophic consequences on property values. The real estate market will likely rebound once the crisis is over and the QPAREB maintains that even during health emergencies, real estate remains a safe investment.
“Although the impact of COVID-19 is still difficult to measure, real estate can rely on fundamental factors to recover,” said Charles Brant, the QPAREB’s Director of Market Analysis. “Favourable population growth, an employment level that is high enough to withstand a temporary economic shock and low interest rates are among the factors that work in favour of the real estate market.”
The economist does point out that the necessary closure of our borders will have an impact on our market. We can expect to see job losses as a consequence of anticipated bankruptcies. These will have a negative impact on the growth of disposable income and will undermine consumer confidence, which will be particularly evident in the second quarter of the year.
After an exceptional year in 2019, we can expect 2020 to be marked by a significant decrease in transactions. However, the drop in prices should be less significant. “We do not expect to see a substantial decline in selling prices. Some areas may show stability,” said Mr. Brant.
No catastrophe expected
Population growth, linked in particular to recent immigration, is generating enough demand on the real estate market and this situation is likely to continue. In the short term, we can expect COVID-19 to have a negative impact on jobs and consumer confidence. That said, the very low unemployment level that we were experiencing before the start of the crisis leads us to believe that, in the medium and long term, after a sharp one-time increase, unemployment will return to a level that is in line with or below the average of last ten years.
Also, we can count on very low interest rates and all indications suggest that these rates will be further lowered in the very short term, which is favourable for real estate. Finally, the Quebec market is not affected by overvaluation, like other regions. This is an additional attraction for investors and households.
The economist indicates that Quebec’s real estate market rests on a particularly solid foundation. “All in all, the year will not be what we had anticipated, but we are not expecting a disaster either. The residential real estate market is particularly tight and the low level of listings is expected to continue, partially offsetting the slump in sales. Although it could become a crisis if the situation persists, let us not forget that the nature of this crisis is not financial or economic and that central banks and various levels of government are doing everything they can, and have the financial means to support the economy until a treatment and a vaccine are developed and can be administered to the public. The sooner this goal is achieved, the faster the rebound, because the less damage will be done to our economic fabric,” added Charles Brant.
Real estate remains tangible, which gives it a more stable value and resilience. Recent crises show us this. Whether it was after the terrorist attack in New York in 2001, after the financial crisis of 2008 or after the economic upheaval caused by an oil crisis in 2014 and 2015, the real estate sector has always emerged unscathed. The QPAREB believes that the same will be true after the COVID-19 crisis.
As for real estate brokerage in Quebec, it is organizing itself according to the measures announced during daily press briefings by government authorities to fight against the COVID-19 pandemic and is adapting to their recommendations. At the QPAREB, we advise our members to follow the instructions issued and we support them in the application of initiatives put in place by their banners, by their real estate agencies or by themselves to prevent the spread of COVID-19.
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 12,700 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 , Instagram and Twitter.
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