Quebec Housing Market Outlook 2023 - 2024 (2024)

Quebec Market Report Summary

• The benchmark single-family home in Quebec increased by 4.6% year-over-year to $523.300 in November 2023.
• Quebec’s benchmark townhouse/multiplex price increased by 2.9% year-over-year to $517,000 in November 2023.
• The benchmark condo price in Quebec increased by 3.3% year-over-year to $368,800 in November 2023.
• Quebec’s benchmark composite home price increased by 3.8% year-over-year to $466,000 in November 2023.
• The average rent for an apartment in Quebec increased by 11% year-over-year to $1,977 for November 2023.

Quebec Housing Market Summary

Data from the Quebec Professional Association of Real Estate Brokers (QPAREB) indicates that the average price of resale residential homes sold across Quebec in November 2023 was $466,000, an increase of 3.8% compared to a year ago.

With a sales-to-new-listings ratio (SNLR) of 59%, Quebec’s provincial housing market has remained balanced for November 2023.

Verbatim: What local experts from the Quebec Professional Association of Real Estate Brokers (QPAREB) say about Québec’s provincial housing market:

2024 Québec Real Estate Market Outlook

The QPAREB forecasts that, after a period of steady declines in activity since the 2020 and 2021 peaks, 2024 will be the first real year of resale market stabilization. The years 2022 and 2023 were characterized respectively by a cooling market and post-pandemic normalization against a backdrop of rapidly rising interest rates. “Although we anticipate a level of activity comparable to that of 2023, we should see more predictability in 2024 in regard to changes in interest rates, with a possible string of corresponding good news announcements,” states Charles Brant, QPAREB Market Analysis Director.

Overall, the residential real estate market in the Province of Quebec should stabilize in 2024 at a level of activity comparable to that of 2023, with a slight 2% drop in sales. In a context of number of active listings below the historical average and more balanced market conditions, there should be no significant variation in median prices for single-family homes in Quebec (around 0%).

“Interest rates are expected to begin a downward cycle against a background of a more marked slowdown of the economy. The decline in the labour market combined with ongoing high prices will contribute to the weakening of sales at the start of 2024. An increase in new listings is expected, which will allow the market to benefit from more balanced conditions. This period will be conducive to more numerous and negotiable purchasing opportunities which will benefit buyers. This situation will be short-lived, as transactional activity should be very reactive to the first announcements of rate cuts, leading to a more decisive market upturn later in the year. This rally will be supported by high migratory flows and the prospects of an economic recovery led by significant structural investments.”

The contrast between the Montreal CMA and Quebec City CMA markets is still quite evident. Thus, sales in the Quebec City CMA should continue to slow, drawing close to their historical average. While in the Montreal CMA, activity should stabilize around 35,000 transactions. Prices in the Quebec City CMA should continue to rise. Single-family homes will experience the largest price increases (+5%), while condominiums will see a more modest growth in prices (+1%). In the Montreal CMA, median prices should remain stable in the coming year. Single-family homes and condominiums could see respective gains of 2 per and 1%.

2023 Year in Review for Québec’s Real Estate

Despite 2022’s rapid rise in interest rates, 2023 was marked by the resilience of Quebec’s resale real estate market. Weak transactional activity did not, in fact, significantly affect prices. The year is ending with median prices comparable to the levels reached a year earlier. According to the Centris real estate broker database, the estimated 76,000 sales in 2023 is close to the historical average of the last 20 years.

“Under the circ*mstances, the good performance of the resale market in Quebec surprised more than one economist in 2023. And yet, it was to be expected. Many repeat buyers with substantial equity were able to benefit from a more peaceful transactional negotiation context. The normalization of the market was characterized by a sharp reduction in overbidding, especially in markets most exposed to it during the pandemic. For their part, first-time homebuyers were in solution mode. They were able to find a property compatible with their budget in many of the more affordable regions of Quebec,” notes Mr. Brant.

“Furthermore, this observation is not unrelated to the fact that international migratory flows have experienced an exceptional catch-up which has benefited more than just the resale market in the Montreal region. As a result, with the persistence of a solid labour market combined with the possibilities of amortizing mortgage payments over a longer period to mitigate their increase, no massive return of properties to the market has taken place. On the contrary, market conditions remained resolutely in favour of sellers, allowing prices to recover ground lost in 2022, and even reach new highs in several regions, despite declining transactional activity.”

Almost all of the province’s regional markets remain favourable to sellers. In this context, it seems that the level of affordability is a key determining factor in 2023. In fact, regions with median prices lower than that of the province saw prices rise to reach a new peak in 2023. In contrast, regions with higher prices recorded slight declines in prices.

Resilience of metropolitan areas

Most of Quebec’s CMAs have managed to erase the 2022 price corrections and are even posting price increases greater than that of the province. It should be noted, however, that the Montreal and Gatineau CMAs, which are also the most expensive, posted a 2% drop in the median price of single-family homes.

Month-over-Month Expectations for Quebec’s Housing Market

The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market.

Changes To Quebec’s Regional Prices by Property Type

Who’s Buying Quebec Real Estate?

Until recently, the primary demographics driving demand in Quebec’s, and more importantly, its biggest city, Montreal’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s university towns, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in and around Montreal.

With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the Quebec homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Quebec will impact it; according to Statistics Canada, foreign investors make up less than 5% of homeowners in Quebec’s total homeownership. However, that number significantly jumps to 50% when considering properties valued over $1 million for non-Quebec residents.

Multi-property Investors

According to an article by Newswire, investors and multi-property owners accounted for over 16% of Quebec’s homebuyers in 2021, particularly in downtown Montreal, where the numbers were even higher.

First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference.
According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.

Upsizing Buyers

Upsizing by buyers has driven Quebec’s demand for single-family homes, which showed the highest year-on-year price increase of all property types from $371,700 in February 2020, which is still more than 39% lower than today’s price at $517,800. You’ll notice that most of Quebec’s 7-digit home valuations are centred in and around the Outremont and Westmount boroughs of Montreal.

Immigration & Out-of-province Migration

While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Quebec’s affordable homes a continued surge. Although many provinces except for Alberta saw a stark net migration out, Quebec continues to see net migration into the province due mainly to more affordable housing and distinct culture. Quebec currently boasts the second-best labour market and participation rate. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.

First-Time Homebuyers

Getting a mortgage in Quebec as a first-time buyer can be challenging for many. On average, Quebec municipalities have some of the highest property tax rates among the larger provinces of comparable size. Ontario averages around 1%, whereas BC and Alberta average well below that.

While programs like the First Time Home Buyer Incentive are in place to help people afford homes in Quebec, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $120,000.

Given the slowdown over the last 12 months in home prices, Quebec remains an affordable market to purchase a first home – for those looking to get good value for their money!

Canada’s Regional Rental Market Performance in 2023 and Expectations for 2024

Canada’s regional rental market has experienced significant fluctuations over the past year. With influences from economic growth, interest and mortgage rates, and immigration, the market has shown resilience amidst challenges. This article reviews the performance of the regional rental markets 2023 and looks at possible expectations for 2024, focusing on key markets in Quebec, Ontario, BC, Alberta, Toronto, Montreal, Ottawa, and Calgary.

In 2023, the Canadian economy experienced challenges that directly impacted the real estate and the directly correlated rental market. The year was marked by inflation and higher rates, straining the real estate and markets. Despite these challenges, the market remained resilient, with specific segments showing promising growth.

“We project virtually flat economic growth in 2024, with momentum possibly picking up later in the year. However, the economy isn’t likely to normalize to a better growth rate until 2025,” says Peter Norman, Vice President and Chief Economist at Altus Group.

In 2023, Canada’s rental market had to navigate a series of pressures. The market witnessed a slowdown in transaction volume throughout the year, with sales activity reducing by 37% compared to 2022 due to supply constraints. Despite the decline, the market showed resilience, as demand remained high throughout the year.

One of the major concerns in the Canadian rental market in 2023 was housing affordability. The surge in population growth, fueled by international students and temporary foreign workers, put immense pressure on housing availability and affordability. This issue is expected to continue into 2024, with a need for more affordable housing solutions.

Rent inflation was another significant trend in the Canadian rental market in 2023. Average asking rents for all residential property types in Canada held close to the record high in October 2023, with a slight 0.2% decrease in November. The annual rent growth rate also moderated for the third consecutive month in November 2023.

The Bank of Canada’s stance on interest rates considerably impacted the rental market for 2023. The central bank’s indication that inflation was not reducing fast enough led to speculations of interest rate increases. Higher interest rate speculations had a lengthening effect on many market issues, including slowing transaction volume.

The performance of the regional rental market in Canada varied across provinces in 2023. Some provinces like Alberta experienced annual solid growth in apartment rents, while others like Ontario and Manitoba saw slower increases. As we look into the specifics, we’ll focus on Quebec, Ontario, BC, Alberta, and the major cities within these provinces.

The annual growth rate in apartment rents in Quebec moderated compared to previous months. Despite this slowdown, Quebec still experienced substantial growth in rental rates. The province also saw the fastest-growing market for apartment rents in Côte Saint-Luc, where average rents rose 29.4% with a year-over-year increase.

Ontario experienced a slow growth in rental rates, with an annual increase of just 5%. Despite this slow growth, the province was home to some of the most expensive markets in Canada. Oakville, Richmond Hill, and Etobico*ke were among the top markets regarding the highest asking rents.

Similar to Ontario, BC experienced slower growth in rental rates. However, the province still had the highest average asking rents in the country. North Vancouver, Coquitlam, Burnaby, and Richmond were among the most expensive markets in BC.

In contrast to Quebec, Ontario, and BC, Alberta saw a significant increase in rental rates. Alberta led the country in long term annual growth in apartment rents. Lloydminster and Red Deer saw the fastest growth in apartment rents, with annual rent increases of 17.2% and 17.1%, respectively.

The performance of the rental market also varied across major cities in Canada. In 2023, Toronto’s average apartment rents decreased annually for the second month since October. Despite this decrease, the average asking rent for a shared unit in Toronto was considerably high, averaging $1,322, while those with 2 bedrooms hit an average of $3,450. Given the high interest rates and cost of living, housing affordability remained a significant issue in the city.

In Montreal, the increased asking rents for apartments slowed down compared to previous months. Nevertheless, the city witnessed an annual growth of 8.5% in November 2023. The average rent for shared rental units in the city was slightly lower than in Toronto, averaging $956.

Ottawa’s rental market experienced a slower growth rate than other major cities. The average asking rent in the city increased by 6.8% annually to $2,238. The average rent for shared units was comparatively lower, averaging $962.

Calgary’s rental market bucked the trend in 2023, with the city witnessing an upward trajectory in home prices. While the city saw a 10.4% increase in apartment rents over the year, it is expected to see the most significant gains of all major markets at 8.0% in 2024.

The Canadian rental market is expected to face several challenges in 2024. However, these challenges will likely open new opportunities for real estate investors looking for a reasonable rate of return. The market is expected to continue facing pressure from higher interest rates. The need for more capital poses a challenge for the housing market. Furthermore, the uncertainty surrounding valuations is expected to impact the transaction volume in the market.

Despite the challenges, specific segments of the market present promising growth opportunities. Multifamily residential housing is expected to deliver significant growth in 2024. The performance of Canada’s regional rental market in 2023 and expectations for 2024 paint a picture of resilience amidst challenges. While the market faced several hurdles in 2023, it showed remarkable resilience and has promising growth opportunities for 2024. As we progress, it will be interesting to see how the market navigates through these challenges and capitalizes on the emerging opportunities.

Each $100,000 in mortgage balance costs an average of $587 per month on nesto’s lowest fixed 5-year rate at and $641 per month on nesto’s lowest adjustable 5-year rate at . Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization. Each 0.25% change in mortgage rates impacts the monthly payment by $15 on a 25-year amortization.

Rental Prices Compared to Other Canadian Cities

Rental Prices Compared to Other Provinces and Nationally

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