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Residential Market: Prices Stabilizing in Quebec, Rising Slightly in Ontario
By Hélène Bégin, Senior Economist
HIGHLIGHTS
f Home sales in Quebec declined once again in July. The drop is 1.1% compared to June and 26.1% versus the level in January 2021.
f Stabilization of the average price was confirmed in July.
The variation was only -0.1% compared to the previous month. However, the average price of just under $450,000 in Quebec was 15.9% higher than in July 2020.
f In the Montreal metropolitan area, sales rose 2.5% in the space of a month. The average price reached $561,505 in July, slightly higher than in June.
f In Ontario, sales were down 3.3% on a monthly basis, representing the fourth straight decline since the peak in March 2021.
f The average price in Ontario reached $853,007 in July, up 1.0% from June. This recovery comes after a slight downward adjustment in the spring.
COMMENTS
As expected, the resale market in Quebec is calming down after a period of intense activity. Despite the gradual decrease in the number of properties sold, the level remains historically very high.
The average price is finally stabilizing after soaring for more than a year. The ratio of sales to new listings has weakened in recent months, so the market is not as tight in the province overall.
In Ontario, the pressure on the resale market has increased a notch since the summer, due to a more limited supply. Prices have resumed their upward trend. This trend is mainly driven by smaller communities outside the Greater Toronto Area.
ECONOMIC STUDIES | AUGUST 16, 2021
IMPLICATIONS
The decline in sales and price softening align well with our forecasts. However, activity will remain strong compared to the pre-COVID period. Despite the improving job market and continuing low interest rates, properties are significantly less affordable due to last year’s price surge. The boom seems to be over and the lull should continue over the next few months.
GRAPH
Existing home sales soften in Quebec and prices are relatively stable
Sources: Canadian Real Estate Association and Desjardins, Economic Studies In thousands
300 325 350 375 400 425 450
20 40 60 80 100 120 140
2019 2020 2021
Milliers
Milliers
Sales (left) Average price (right)
In $k
