Montreal Property Market — Balanced Market — Oct 2023
The Montreal property market is now balanced. After rapid price appreciation, the market cooled in 2022.
In Spring 2023, while prices rose, purchase demand was lower than in previous years. Prices were rising because of restricted demand, not because of robust demand from buyers.
House prices have risen roughly seven to ten per cent in 2023 and have now plateaued.
The Montreal property market is now balanced partly due to constrained demand.
In 2022, when supply was at these levels, prices were falling.
Homes are still selling quickly. However, buyers are now finding more negotiating power, and they are starting to get better deals.
Condo apartment prices have also risen in 2023 by roughly two to five per cent.
The condo apartment market is balanced. Buyers and sellers have equal negotiation power.
It is still too early to say whether the Montreal property market is entering a bear market. However, it is clear that the market has changed from the frenzied pace of Spring.
Buyers still need to prepare, be patient and do their research before making an offer, and in these market conditions, sellers will need to learn patience as well. Sellers need to be more strategic when determining a list price. Listing a low price may no longer guarantee a bidding war.
Here is an overview of the key factors that are affecting the Montreal property market in 2023:
Rising interest rates: The Bank of Canada has raised interest rates several times in the past two years, and higher interest rates reduce home-buying budgets, pushing many homes that would have been affordable two years ago beyond the reach of current homebuyers. This borrowing cost effect cools down the housing market.
Increasing inventory: Because fewer purchases are being made, the inventory of unsold active listings is growing. This creates more buyer choice, which means they have the luxury of viewing several homes before making an offer. Also, they are less perplexed if one offer is refused since other homes that meet their needs are available.
Stalled Consumer Sentiment: Expectations of home price gains in the near future are 50/50. Half of Canadians think prices will rise, and half expect them to remain flat or drop. While sentiment was rising, buyers gained courage. Now that sentiment has stalled, many might take a wait-and-see approach.
Overall, the Montreal property market is still a seller's market but is starting to show signs of balancing.
Buyers should be prepared to be patient and do their research before making an offer.
Here are some tips for buyers in the current Montreal property market:
Be prepared to negotiate: With more inventory on the market, motivated sellers are willing to negotiate. Unlike earlier this year, they can’t be price setters. Buyers should be prepared to negotiate the price of the home.
Do your research: Before making an offer, be sure to research the property and other properties in the area. This will help you know the options available and make an informed decision.
The Montreal property market constantly changes, so staying current on the latest trends is essential. Following these tips can increase your chances of success in the current market.
