L'ÎLE-DES-SŒURS, QC, May 31, 2017 /CNW Telbec/ - The Québec Federation of Real Estate Boards (QFREB) is revising its forecasts for 2017 significantly upwards due to strong job creation, a considerable increase in net migration and a rebound in consumer confidence.
The QFREB is therefore enhancing the forecasts it presented in January, in which it predicted a 7 per cent decrease in sales. The QFREB now anticipates a 2 per cent increase in sales across Québec as compared to 2016, with 80,000 transactions expected on the real estate brokers' Centris® system. This would make it the best year in terms of sales since 2010.
The QFREB is also similarly revising its forecasts for price growth. The median price of a single-family home in Québec is now expected to reach $242,000 this year, a 3 per cent increase compared to 2016. This would be the strongest price growth since 2012.
To learn about the evolution of sales and prices since 2010, click here.
Strong start to the year
In the first three months of 2017, the number of sales registered in the real estate brokers' Centris® system increased by 6 per cent compared to the same period last year, making it the most active first quarter in five years.
By property category, it is mainly condominiums that have had the strongest momentum since the start of the year. In the first four months of 2017, condominium sales increased by 10 per cent in Québec, while sales of single-family homes increased by only 2 per cent and sales of plexes remained unchanged compared to the first four months of 2016.
In terms of prices, increases were also well beyond expectations, particularly in the Montréal area. In the first four months of 2017, the increase in the median price of single-family homes across the province stood at 3 per cent, which was driven by a 6 per cent surge in the Montréal Census Metropolitan Area (CMA). The same was true of condominium prices, as the 3 per cent increase exceeded expectations.
"In light of these results, it is clear that the mortgage tightening measures introduced last fall have not yet weighed as heavily on first-time buyers as we had anticipated," said Paul Cardinal, Manager of the QFREB's Market Analysis Department. "Perhaps many of them finally resigned themselves to buying a less expensive property. At the same time, the increase in demand from experienced buyers may have offset the decrease in the number of first-time buyers. This is what the data on sales by price range hints at, particularly in the Montréal market," he added.
A booming job market
The job market situation is certainly one of the most important key factors influencing the residential real estate market. In April 2017, the province had 88,000 more jobs than one year earlier. This excellent performance also resulted in a significant decrease in the unemployment rate from 7.4 per cent in April 2016 to 6.6 per cent in April 2017.
The employment gains are therefore excellent news for property resales. However, it is important to know that the effect of these job gains is not immediate, so there may be a delay of several months before its full effects are felt.
Significant increase in net migration and in the number of non-permanent residents
The ISQ recently published preliminary data on net migration across Québec in 2016, which indicates that there was a sharp increase in the number of newcomers, a peak since 1988, particularly when non-permanent residents are included.
Once again, this is good news for the real estate market. Even though new arrivals will not necessarily become homeowners – or at least not immediately – each new household does need a place to live, which contributes to the demand for housing.
Consumer confidence revived
The Conference Board of Canada's confidence index helps measure consumers' mood regarding the real estate market. In particular, one of the survey questions measures whether, in the mind of consumers, it is a good time to make a major purchase such as a property. After a short and somewhat gloomy period from November 2016 to January 2017, which was likely due to the election of Donald Trump as President of the United States as well as the implementation of mortgage tightening measures across Canada, consumer confidence rebounded to a level similar to that observed in the summer of 2016, which was at a new record since 2004.
Montréal stands out
The province's strong sales results at the start of the year are largely attributable to the Montréal area, which had the lion's share of the jobs that were created since the start of 2016.
The QFREB expects 41,500 transactions to be concluded in the Montréal CMA in 2017, a 4 per cent increase compared to 2016. This would make it the best year in terms of sales since 2010.
It is important to know that market conditions for single-family homes have recently started to favour sellers once again. This will accelerate price growth from 2 per cent last year to 6 per cent this year. The median price of single-family homes is therefore expected to reach $312,500 across the CMA.
As for condominiums, demand is currently sustained and market conditions are in the process of rebalancing. The QFREB expects that half of all condominium sales in 2017 will be at a price that is higher than $247,000, up 3 per cent from the median price of 2016.
About the Québec Federation of Real Estate Boards
The Québec Federation of Real Estate Boards (QFREB) is a non-profit organization representing the province's 12 real estate boards and their nearly 13,000 member real estate brokers. 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 a collaboration-oriented approach as well as resource sharing.
For more information, see the QFREB's Reviewed and Updated Forecasts for 2017.
SOURCE Québec Federation of Real Estate Boards
For further information: Jacynthe Alain, Assistant Manager, Communications and Public Relations, Québec Federation of Real Estate Boards, 514-647-8249, [email protected]