Recovery for the Montréal real estate market in the third quarter

This recovery should continue through the end of the year. However, increased unemployment in Quebec compared to the rest of Canada is worrisome for the real estate market.

MONTRÉAL, Oct. 10, 2013 /CNW/ - The Royal LePage House Price Survey released today showed that after several quarters of slumping property sales, the Montréal real estate market rebounded in the third quarter, as anticipated by the company earlier this year.

In the third quarter, the average price of detached bungalows nearly stalled with only a very slight increase of 0.6 per cent to $288,868. The average price of standard two-storey homes continued to rise 3.9 per cent to $397,643, and that of standard condominiums rose 1.2 per cent to $240,306.

"In terms of condominiums, the large inventory of both new and resale properties is what is causing this stabilization in prices. Clearly, the large number of new condominium projects remaining unsold negatively impacts the resale market. In addition, the market for detached bungalows is less and less popular with buyers compared to two-storey homes. Buyers sometimes get the impression that space is not fully maximized in this type of property, especially on the Island of Montréal where optimum use of space is key," commented Dominic St-Pierre, senior director of Royal LePage for the Quebec Region.

As forecast earlier this year, unit sales are on the rise again in the third quarter for the first time in several quarters for most housing types surveyed. While sales of detached bungalows declined 3.6 percent, sales of standard two-storey homes went up 7.8 per cent and standard condominiums increased 2.6 per cent.

Another encouraging fact is that all types of buyers continued to buy in the third quarter. "However, buyers remain very cautious, buying homes a little less opulent than in recent years. Sellers have also begun to expect less in terms of the price they hope to get for their property. They will most likely need to lower their asking price even more since the market would no doubt benefit from lower prices," added Mr. St-Pierre.

As for inventory, it remained high in the third quarter in the Montréal area. "The number of units for sale is still rising for all types of properties, mainly on the Island of Montréal. Single-family homes are up 16.5 per cent and condominiums are up 10.9 per cent," said Mr. St-Pierre. "The number of new listings is on the rise, as is the number of active listings, which reached the highest level yet in 15 years. Encouragingly, however, the growth in inventory seems to be levelling off, with increase percentages lower than they have been for a long time in the condominium market."

"Home sales rebounded in the third quarter, as expected, and this recovery should gain momentum in the next quarter. Meanwhile, the high inventory will continue to dampen home prices, potentially causing a slight decline in prices in the fourth quarter. The economic recovery in Canada and around the world bodes well, although increased unemployment and a stagnant provincial economy continue to be concerns for Québec.  Hopefully the job market will rebound sharply before interest rates potentially go up around the end of next year, because this could adversely impact the Montréal and Québec real estate markets," concluded Mr. St-Pierre.

House Price Survey for the third quarter of 2013
Average House Prices

About the Royal LePage House Price Survey

The Royal LePage House Price Survey is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 90 communities across the country. A complete database of past and present surveys is available on the Royal LePage website at www.royallepage.ca. Current figures will be updated at the end of the first quarter of 2013. A printable version of the third quarter 2013 survey will be available online on November 7, 2013.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of 14,500 brokers in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:  BRE.

For more information, visit www.royallepage.ca.

SOURCE Royal LePage Real Estate Services