Sellers are right to stay firm on home prices amid soaring rates, experts say
High interest rates have dragged Montreal home sales by a staggering 40% year on year. Despite the drop, Montreal’s home prices have barely budged – and sellers would be right to keep their prices afloat, some economists suggest.
While home sales activity typically slows down in the last month of the year, Montreal’s home sales for December 2022 still came as a shock, with only 2,232 homes changing hands in the city’s housing market compared to the 3,657 deals closed the year before. This marked a 39% yearly decline in home sales.
The city also suffered an 18% decline in monthly homes sales activity and more than a 50% decline from two years ago, according to the latest data from WOWA.ca.
Economist Stephanie LaPierre, of the association of real estate brokers in Quebec (APCIQ), said the situation was a result of raised interest rates, which had buyers and sellers hesitating to make a move on property and eyeing the market for just a little longer.
“People are trying to see, ‘What is the best move to do for me? Do I sell? Do I buy a house right now, or not?’ So what we see is a slowdown in the market,” she said to CTV News.
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In the meantime, Montreal’s home prices are in surprisingly good shape. WOWA.ca reported only a 2% monthly decrease in the average home price sold in Montreal in December 2022 and only a 3% dip from December the previous year.
North East Real Estate & Mortgage Agency founder Terry Kilakos observed that people were “sticking to their guns” and staying firm on their prices.
“Houses tend to stay longer on the market, [whereas] before, when you list your house, it would be sold in a weekend,” he told CTV News.
Both experts agreed that Montreal’s housing market presented a long game; one the patient seller would eventually win.
“Property with good quality, good value – there [are] still buyers who want those [kinds of] properties,” LaPierre said. “So that’s why the price is not correcting that much. The price is still stable, with a little bit of variation.”
LaPierre was confident home prices would stay that way as interest rates were expected to reach their peak soon. And Montreal’s home prices had always been lower than those in other major Canadian cities, she pointed out.
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Kilakos predicted a better year ahead for home buyers. The days when bidding wars saw homes go for prices way above asking were behind them, although prices couldn’t be expected to fall significantly just yet.
“In Quebec, we’ll probably be looking more at a balanced market,” he told CTV News. “In certain neighbourhoods, we’ll probably end up seeing a buyers’ market start to occur, which is good.”
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For now, LaPierre recommended home buyers in Montreal be strict with their budget.
“What I would say … to those people who want to go on the market: do it with the right finances,” she was quoted as saying. “You have to find a house that is going to fit your budget.”
Any thoughts on Montreal’s housing activity? Let us know in the comments below.
