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 symbolTSX:BRE.
For more information, visit www.royallepage.ca.
SOURCE: Royal LePage Real Estate Services
Laetitia Rampazzo
High Road Communications
514-908-0110, ext. 307
[email protected]
Tammy Gilmer
Director, Public Relations and National Communications
Royal LePage Real Estate Services
416-510-5783
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