Montreal house prices stabilize as sales soften during third quarter of 2012

Changes to mortgage rules and rising inventory help stabilize the market

MONTREAL, Oct. 3, 2012 /CNW/ - The Royal LePage House Price Survey published today shows that the Montreal market has slowed in recent months. Given the steady increase in inventory over the last several months and the slowdown in sales recorded in the third quarter, Royal LePage expects property prices to moderate by the end of the year, especially for condominiums where there may be a slight decrease in prices.

The average price of a detached bungalow rose 4.5 per cent to $287,500 compared to the same quarter in 2011. The average price of a standard two-storey home rose 5.5 per cent to $387,786 while the average standard condominium rose 0.3 per cent to $236,989.

"We are now in a buyer's market. Inventory continues to grow while sales are slowing down and this will certainly have an impact on prices in the next quarter. For now, average prices continue to remain stable or increase slightly, but price softening should be felt in the coming months, especially in condominiums," says Dominic St-Pierre, Director of Royal LePage Real Estate Services for Québec.

"Buyers have more time to explore and less pressure to make decisions quickly," said St-Pierre.

This quarter, the South Shore outperformed Montreal and Laval regions. However, Dominic St-Pierre explains this increase as a return to normal, since in 2011 the South Shore sectors had underperformed in several types of properties.

According to Royal LePage, the new mortgage rule changes are contributing significantly to the market downturn. "The market was already stabilizing by itself. We don't believe these measures were necessary. These new changes have definitely contributed to the softening of the market, while eliminating a segment of potential buyers from the market. We see less first-time buyers, and more buyers who are looking at their second or third property," explains Dominic St-Pierre.

Although sales of detached bungalows remained stable this quarter on the Island of Montreal, sales of standard two-storey homes fell by 7.3 per cent. Sales of standard condominiums decreased by nearly 10 per cent in Montreal but remained stable in Laval and increased slightly on the South Shore.

Inventory is rising for all types of properties. Although the single-family home inventory has increased by 10 per cent, the supply of condos on the other hand increased by 23.4 per cent driven, among other things, by the large number of condominium construction projects underway in the metropolis.

Dominic St-Pierre also notes that luxury property sales are doing well with a 9 per cent increase in sales of properties over a million dollars. "This type of buyer is definitely active. Luxury condos also find buyers despite the increase in supply," he said.

Canada House Price Survey for the third quarter of 2012
Average home prices

Detached bungalows
Market Average
Q3 2012
Average
last
quarter
Q3 2011
average
Difference
(%)
Beaconsfield 331,000 322,000 307,000 7.8%
Dorval 305,000 292,500 290,000 5.2%
Pierrefonds 289,000 287,000 287,000 0.7%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges n/a n/a n/a n/a
Ville-Marie n/a n/a n/a n/a
Plateau-Mont-Royal n/a n/a n/a n/a
Rosemont/Petite-Patrie n/a n/a n/a n/a
Laval 276,000 273,000 263,000 4.9%
Brossard 263,500 257,500 235,000 12.1%
Longueuil 247,000 246,000 233,000 6.0%
Boucherville 301,000 290,125 310,000 -2.9%
Montreal 287,500 281,161 275,000 4.5%

Standard two-storey home
Market Average
Q3 2012
Average
last
quarter
Q3 2011
average
Difference
(%)
Beaconsfield n/a n/a n/a n/a
Dorval 316,000 316,500 268,000 17.9%
Pierrefonds 397,000 392,000 385,000 3.1%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges 510,000 503,000 488,000 4.5%
Ville-Marie n/a n/a n/a n/a
Plateau-Mont-Royal n/a n/a n/a n/a
Rosemont/Petite-Patrie n/a n/a n/a n/a
Laval 358,500 352,250 333,000 7.0%
Brossard 379,000 382,375 369,000 2.7%
Longueuil 335,000 335,000 335,000 0.0%
Boucherville 419,000 412,500 392,500 6.8%
Montreal 387,786 384,804 367,500 5.5%

Standard condominium
Market Average
Q3 2012
Average
last
quarter
Q3 2011
average
Difference
(%)
Beaconsfield n/a n/a n/a n/a
Dorval n/a n/a n/a n/a
Pierrefonds 203,750 203,000 206,000 -1.1%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges 246,000 250,000 245,000 -0.4%
Ville-Marie 324,500 324,500 322,000 0.8%
Plateau-Mont-Royal 315,650 313,500 317,000 1.5%
Rosemont/Petite-Patrie 270,000 268,500 262,000 3.1%
Laval 194,000 196,500 192,000 1.6%
Brossard 189,000 187,500 195,000 -3.1%
Longueuil 180,000 176,000 177,500 1.4%
Boucherville 210,000 211,000 211,500 -0.7%
Montreal 236,989 236,528 236,333 0.3%

The Royal LePage House Price Survey is the largest and most comprehensive real estate study of its kind in the country. It provides information on seven types of housing in over 250 cities and neighbourhoods from coast to coast. This release refers to an abbreviated version of the Survey highlighting the price trends of the three most common housing types in 80 communities across the country. It is possible to access a comprehensive database containing data collected during the surveys by visiting the Royal LePage website at www.royallepage.ca. The current data will be updated at the end of the second quarter. A printable version of the third quarter 2012 report will be available online on November 2, 2012.

Property values in the Royal LePage House Price Survey correspond to the Royal LePage assessment of fair market value of properties in each location based on local data and market information provided by the Royal LePage residential real estate experts. In some regions, it is possible to access historical data as far back as the early 1970s.

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 14,000 real estate professionals in over 600 offices 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

For further information:

Laetitia Rampazzo
High Road Communications
514-908-0110, ext. 307
Laetitia.rampazzo@highroad.com

Tammy Gilmer
Director, Public Relations and National Communications
Royal LePage Real Estate Services
416-510-5783