Housing Market Highlights
Planiprêt
Apr 25, 2023
The Bank of Canada’s soft landing is on track…for now
Highlights:
- The inflation fight is progressing well, but the Bank of Canada says it may need to keep rates higher for longer to get back to target.
- New listings have fallen to 20-year lows, which is putting a floor under the housing market.
- A new record for population growth coupled with slowing housing starts raises risk of an even worse supply crisis down the road.
- Mortgage delinquencies starting to inflect higher and could potentially double in the next year.
Summary Québec:
Housing demand continues to cool in Quebec while resale supply remains on the rise. Still, the overall market remains well balanced, and we’re beginning to see signs that prices are stabilizing.
The economy is still on solid footing, but the lagged impact of rising rates should begin to be felt by consumers and businesses later this year, which should result in some modest downward pressure on employment towards the back half of 2022.
Rising rates, weak consumer confidence weigh on Quebec's housing demand
Seasonally adjusted home sales across the province of Quebec fell 6.3% in Q1 of 2023, but they did end the quarter on a solid note with sales ticking up 0.8% month-over-month in March. Demand has now fully retraced the “COVID bounce” and have fallen back to 2015 levels.
In spite of new listings falling 4.7% in Q1, active inventory rose 11% relative to the fourth quarter of 2022. With rising supply and weak demand, the market balance deteriorated again with months of inventory jumping to 5.7 from 5.0 in Q4. Still, that leaves it well below normal levels over the past decade. Seasonally adjusted average house prices slipped 0.2% in the first quarter in spite of a 1.6% monthly increase in March. That left prices down a modest 3.8% compared to the same time last year.
For more information about demographic growth and the Quebec labour market: Housing and Mortgage Market Review: April 2023 - Quebec
The economy is still on solid footing, but the lagged impact of rising rates should begin to be felt by consumers and businesses later this year, which should result in some modest downward pressure on employment towards the back half of 2022.
Rising rates, weak consumer confidence weigh on Quebec's housing demand
Seasonally adjusted home sales across the province of Quebec fell 6.3% in Q1 of 2023, but they did end the quarter on a solid note with sales ticking up 0.8% month-over-month in March. Demand has now fully retraced the “COVID bounce” and have fallen back to 2015 levels.
In spite of new listings falling 4.7% in Q1, active inventory rose 11% relative to the fourth quarter of 2022. With rising supply and weak demand, the market balance deteriorated again with months of inventory jumping to 5.7 from 5.0 in Q4. Still, that leaves it well below normal levels over the past decade. Seasonally adjusted average house prices slipped 0.2% in the first quarter in spite of a 1.6% monthly increase in March. That left prices down a modest 3.8% compared to the same time last year.
For more information about demographic growth and the Quebec labour market: Housing and Mortgage Market Review: April 2023 - Quebec
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