The year 2024 marked a turning point for Quebec's mortgage market. Following two years of sustained interest rate hikes, a gradual easing of monetary policy has allowed for a modest recovery. However, access to homeownership remains a challenge for many Canadians due to a still-tight market and the growing dominance of major lenders.

A Moderate but Tangible Recovery

With over 224,000 mortgages registered, the market experienced a 10% increase compared to 2023. This improvement is largely attributed to declining interest rates, which reached 3.25% by the end of the year, and inflation stabilizing at 1.8%.

These favorable conditions have encouraged real estate transactions and refinancing, particularly due to the removal of the stress test for uninsured mortgage transfers and new measures facilitating credit access.

Increased Dominance of Major Lenders

While the entire market benefited from increased activity, the distribution of market shares shifted significantly. Smaller lenders saw their market share decline from 16% to 11%, impacted by increasingly aggressive competition from major banks.

Among the key players, Desjardins stands out as the market leader, holding 43.19% of the market with 50,076 new mortgages. National Bank and RBC also saw their market activity grow by 15%, while Scotiabank recorded an impressive 88% increase, strengthening its presence in Quebec.

Conversely, BMO experienced a 7% decline in market share despite its return to brokerage, illustrating the challenges some players face in adapting to new market dynamics.

Rising Foreclosures: A Persistent Concern

Despite monetary easing, financial pressure on households has continued to mount. In 2024, the number of foreclosure notices reached 5,686, up 10.6%. The number of abandonments rose by 16.8%, while judicial sales increased by 6.8%.

These trends reflect the prolonged impact of high rates in 2023 and early 2024, straining homeowners, particularly those with variable-rate loans. Additionally, rising property prices and inflation on basic goods have exacerbated financial difficulties for vulnerable households.

Outlook for 2025

The year 2025 will begin with a still-evolving market. The recent reduction of the policy rate to 3% should provide relief for borrowers, encouraging refinancing and homeownership. However, economic uncertainty remains, particularly due to potential trade tensions with the United States and new immigration policies that could impact housing demand.

While lower interest rates offer some breathing room, they are unlikely to reverse the upward trend in real estate prices in major urban centers like Montreal. The market will remain polarized, with favorable conditions for creditworthy borrowers, while those in financial difficulty may face increasing challenges.

Conclusion

In 2024, the Quebec mortgage market demonstrated resilience and adaptability amid an evolving economic landscape. With falling rates, shifting market shares, and rising foreclosures, the balance remains fragile. The coming year will be pivotal, with monetary and economic policy decisions playing a crucial role in shaping the trajectory of Quebec’s housing market.