Oversupply of Condominiums: More Fear than Actual Harm

L'ÎLE-DES-SOEURS, QC, Oct. 3, 2016 /CNW Telbec/ - According to the Québec Federation of Real Estate Boards (QFREB), although current market conditions for condominiums still show an oversupply, several indicators demonstrate an improvement on the resale market. Thus, we are far from the catastrophe that many observers had predicted. In its most recent study, the QFREB provides an update on the supply of condominiums on the resale market in the metropolitan areas of Gatineau, Montréal and Québec City.

Active Listings: An End to the Upward Trend

In May 2015, the supply of condominiums on the resale market across the province had reached an all-time high, as 20,879 condo units were for sale through the real estate brokers' Centris® system. However, after 67 consecutive monthly increases, this past March marked the first decrease in active condominium listings in Québec since July 2010. The supply of condominiums has continued to decrease steadily since March and, cumulatively for 2016, active condo listings have dropped by 3 per cent across Québec compared to the same period last year.

Condominium Sales are Gaining Strength

After registering decreases from 2012 to 2014, condominium sales across the province have essentially bounced back. Following a 3 per cent increase in transactions in 2015, condominium sales from January to August 2016, concluded through a real estate broker in Québec, have increased by 6 per cent compared to the same period last year. However, the situation varies significantly by geographic area. In the Montréal CMA, condo sales rose by 8 per cent so far this year, but have remained stable in Gatineau and have decreased by 4 per cent in the Québec City CMA. To see the table "Condominium resale market", click here.

Market Conditions Tighten in Montréal and Gatineau

Despite renewed sales activity and the recent drop in active listings, the number of condominium units available across Québec remains high. The wide choice that is available to buyers gives them a distinct advantage in negotiations, and this is reflected by a slow increase in the median price of condominiums and longer selling times. However, market conditions for condominiums, which have given buyers the upper hand since 2013, are becoming tighter in the Montréal and Gatineau CMAs. In contrast, the situation in the Québec City CMA is unfolding differently. Since the end of 2015, the drop in the number of transactions combined with the increase in active listings have led to more relaxed market conditions in Québec City, thus strengthening the advantage that buyers already had.

Still No Upward Pressure on Prices

Condominium prices have been increasing at a very modest pace for more than three years now. In fact, the median price of condominiums across the province grew by only 4 per cent from 2012 to 2015, with an annual change that ranged between 1 and 2 per cent. Cumulatively for 2016, the median price of condominiums across Québec ($220,000) is unchanged compared to the same period last year. This result, however, hides a number of regional disparities: the median price of condominiums in the Montréal CMA ($237,890) increased slightly by 1 per cent so far in 2016, while the Gatineau ($161,900) and Québec City ($190,000) markets registered respective decreases of 2 per cent and 4 per cent.

About the Québec Federation of Real Estate Boards

The Québec Federation of Real Estate Boards is a non-profit organization composed of Québec's 12 real estate boards and the close to 13,000 real estate brokers who are their members. Its mission is to support Québec's real estate boards in order to defend, protect and promote the interests of real estate brokers through the provision of services in the areas of professional practices, public affairs and market analysis. The QFREB is guided by an approach that is centred on collaboration and resource sharing.

For more information, please read the QFREB study. 

 

SOURCE Québec Federation of Real Estate Boards

For further information: Jacynthe Alain, Assistant Manager, Communications and Public Relations, Québec Federation of Real Estate Boards, Tel.: 514-647-8249, jacynthe.alain@fciq.ca

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