Montreal home sales drop in September as listings decline
08 Oct 2021
High prices, a lack of properties for sale and an upturn in pre-sale activity on new construction projects have all contributed to a slowdown in residential transactions since the spring.
Residential real estate sales in metropolitan Montreal dropped 28 per cent last month, returning to pre-pandemic levels amid a dearth of available homes. Prices continued to climb.
Some 3,671 residential sales were concluded last month in the Greater Montreal area, compared with 5,120 in the same month a year ago, according to data from the Centris real estate system. Active listings fell 20 per cent and new listings declined 22 per cent. About $2 billion worth of transactions closed, 18 per cent less than in September 2020. Property sales on the island of Montreal shrank 21 per cent.
High prices, a lack of properties for sale and an upturn in pre-sale activity on new construction projects have all contributed to a slowdown in residential transactions since the spring, the Quebec Professional Association of Real Estate Brokers said Tuesday. As a result, the group is now forecasting a drop in transactions for all of 2021, director of market analysis Charles Brant said Wednesday.
“The market is slowing down, and the biggest factor is the lack of supply,” Brant said in a telephone interview. “Inventory is reaching levels that we last saw in 2003. Many house purchase projects have already taken place, and as we approach year-end, we think the sales growth will turn negative.”
While Montreal’s real estate market is still showing “significant” signs of overheating, the proportion of sales concluded above the asking price has weakened over the past five months, the association said.
Property sales from January through September in the Greater Montreal area were up six per cent from the same period a year ago, while active listings were down 20 per cent. On the island of Montreal, total sales were up 20 per cent, while active listings showed a four per cent increase.
Single-family home transactions paced the market’s September decline, falling 37 per cent in Greater Montreal. Condominium transactions dropped 18 per cent, while sales of plexes — defined as properties with two to five dwellings — fell 16 per cent.
Median prices continued their relentless advance. A single-family home sold for a median price of $504,500 in September, up 17 per cent from a year earlier. Condominium prices climbed 15 per cent to $365,000, while plexes rose 13 per cent to $690,000.
“At these price levels, there are fewer buyers for properties,” Brant said. “The risk is that prices will continue to increase. And if speculative investors get involved, that could keep pushing prices up even though the economic fundamentals aren’t there. The market is in a much more vulnerable situation than it was several months ago.”
Real estate activity for all of Quebec also dipped last month. More than 7,700 transactions were completed across the province, 28 per cent less than a year ago, for a combined value of $3.3 billion. Active listings shrank 27 per cent.
Declines in some key regions near Montreal were even more pronounced. Property sales fell 35 per cent in St-Jean-sur-Richelieu, 33 per cent in Laval and the North Shore, 32 per cent on the South Shore and 26 per cent in Vaudreuil-Soulanges.
