Royal Lepage: Montreal real estate prices set to rise between now and Christmas

MONTREAL – Despite rising interest rates, real estate company Royal LePage anticipates an increase in residential real estate prices between now and the end of the year, particularly in the Greater Montreal area.

The broker predicts that prices will rise by 8 per cent in the fourth quarter compared to the same period last year.

However, this compares to a period when prices had been falling, notes Dominic St-Pierre, Royal LePage’s vice-president and general manager for the province of Quebec. The forecast would still represent an increase of 2.1 per cent over the previous three months.

Rising interest rates are forcing some potential buyers to delay their plans, but demand remains strong, St-Pierre adds.

“There’s an incredible demand for property right now. We keep hearing about the lack of inventory. There are a lot of new arrivals, the population of Quebec is growing and we need to house these people. There simply aren’t any properties available on both the rental and resale markets.”

This craze is particularly noticeable in the entry-level category in a context of high prices. “People are looking for places to live, so these properties are very much in demand,” St-Pierre explained.

In Montreal, residential construction is at an all-time low, according to data released by the Canada Mortgage and Housing Corporation (CMHC) last week.

In the first six months of the year, the number in the metropolis fell by 58 per cent, to just 5,927 units.

For the country as a whole, Royal LePage forecasts an average price increase of 7 per cent over last year.

“It’s still too early to make forecasts for 2024,” says St-Pierre. Monetary policy is one of the unpredictable elements that will muddy the waters. He does, however, rule out a cut in mortgage rates next year.

“It doesn’t seem to be in the cards at the moment.”

“Our very preliminary opinion is that we don’t think there are going to be any big price increases over the course of 2024. We don’t think prices are going to go down, either. We think prices will remain relatively stable.”

This report by The Canadian Press was first published in French on Oct. 12, 2023.