The third quarter of 2024 has seen a significant rise in mortgage-related defaults across Quebec, reflecting financial strain on many homeowners. According to data from JLR, an Equifax company, the number of notices of default issued in the province reached 1,392—a 9% increase compared to the same period in 2023 and a staggering 70% rise compared to 2022.

Key Figures and Trends

During the third quarter, 115 foreclosures were registered, marking a 24% increase from the same period last year. Additionally, over the past 12 months, notices of sale under judicial control have surged by 54%, highlighting growing financial challenges for property owners.

The rise in defaults is attributed to the delayed economic effects of the post-pandemic environment, where many high-leverage loans, facilitated by abundant liquidity, are now impacting the financial stability of borrowers. The unemployment rate also played a role, peaking at 5.7% in June 2024, before a slight decline to 5.5% in September.

Regional Insights

Some regions showed pronounced increases in notices of default: Outaouais and Laval reported 30% increases, while Montérégie and Mauricie saw rises of 25% and 53%, respectively. On the other hand, regions such as Capitale-Nationale and Chaudière-Appalaches experienced declines of 37% and 14%, respectively. Montreal had the highest number of notices, with 1,100 issued over the past year, a 32% increase.

Market and Policy Outlook

Despite a 75 basis point decrease in the benchmark rate since the start of summer 2024, aimed at stimulating the economy, the real estate market remains stagnant. Consumer confidence is weakened, and potential buyers are hesitant amid economic uncertainty. In response to these challenges, the Canada Mortgage and Housing Corporation (CMHC) will raise its insured loan cap from $1 million to $1.5 million in December 2024, allowing for lower down payments on higher-value properties and extending amortization periods to 30 years for first-time buyers. These measures aim to improve affordability and drive demand.