Stabilization of Real Estate Prices in 2023: What Should We Expect from the Coming Year?
Return to Stability After a Period of Fluctuations
After nearly a year of decline, real estate prices in Canada are finally showing signs of stabilization. Although the market has seen an annual decline, a slight increase this quarter suggests a gradual recovery in property values. Favorable economic factors such as full employment and limited supply contribute to cautious optimism.
A Slight Increase in Prices Expected in Montreal
Data shows a 1.3% increase in the median property price in the Greater Montreal area this quarter. This figure is expected to reach 3% growth in the fourth quarter of 2023, increasing confidence in the resilience of the market.
A Temporary Slowdown in Sales
Statistics from the Professional Association of Real Estate Brokers of Quebec (APCIQ) show a 31% decrease in sales during the first quarter of this year compared to the same period last year. However, sales activity appears to be picking up with impressive monthly sequential increases. A more complete recovery is anticipated with rate cuts planned for 2024.
Supply is increasing, but is it enough?
For the first time in seven years, the number of new listings is on the rise, indicating a slight easing in the market. Despite this, supply remains insufficient to meet demand.
Buyers Regain Confidence
With stable policy rate forecasts and expectations of lower interest rates, buyer confidence appears to be recovering. A recent Bank of Canada study suggests rates could fall to between 1.25% and 2% by the end of 2024, providing attractive buying opportunities.
The Dilemma: Buy Now or Wait?
Those in a position to buy could benefit from the current price stability and relative absence of bidding wars. However, there is an inherent risk in waiting too long, particularly if prices start to rise again.
Long-Term Outlook: The Importance of Market Balance
The Canada Mortgage and Housing Corporation (CMHC) recommends 620,000 new constructions by 2030 to balance the market, a goal that many experts consider difficult to achieve. The steady rise in demand due to high levels of immigration ensures that prices will rise in the long term.
In summary, the real estate market in 2023 is in a phase of stabilization and recovery. However, challenges persist, notably the imbalance between supply and demand, which could lead to an increase in prices in the years to come. Buyers should therefore act cautiously but decisively.
