Slowdown in transactions: is the race for the chalet over?

Slowdown in transactions: is the race for the chalet over?

Heat wave or not, the real estate fever that hit the market for chalets and second homes two years ago is now experiencing a strong cold wave.

“For a few weeks, visits on weekends with the opening of multiple purchase offers on Tuesdays are no longer part of our reality,” admits Michel Naud, broker at the Engel & Völkers agency in Mont-Tremblant.

“Buyers are calmer, visits are less frenetic and there are fewer oversupply. The interest remains, but there is no longer any room for hype, she says. Sellers may need to lower their expectations. »

The return of the pendulum

The Laurentides, Lanaudière and Eastern Townships, which have always been highly sought after by vacationers, are experiencing the same swing of the pendulum as the rest of the province, says the director of the Real Estate Professional Association’s Market Analysis Service. from Québec. Runners, Charles Brant.

Successive hikes in the Bank of Canada’s benchmark rate since the spring, combined with a resumption of international travel and public concerns about inflation, have had the effect of sharply curbing the momentum of many investors.

“Two years into the pandemic, it’s like things are slowly getting back to normal,” explains Mr. Brant. The market remains in favor of the sellers, but there is a sharp drop in transactions and an increase in prices. »

31% drop in Saint-Sauveur

This is especially true in second home markets, historically the first to suffer in times of economic uncertainty. In Saint-Sauveur, for example, the number of transactions fell by 31% in June, compared to the same period a year earlier.

It is in this changing context that a retired couple, formed by Georges Melançon and Céline Bernier, decided this spring to divest themselves of their residence in Austin, in the Eastern Townships. After living there for 15 years, the couple is ready to move on.

“Essentially, we want to reduce our living space. With the arrival of our grandchildren, we want to spend less time maintaining a house and land that has become too large for our needs. »

The problem is that his project arrives even when the market shows signs of running out of steam. They are not alone in their case. Karine Bonin, a real estate broker associated with Re/Max in Magog, confirms the slowdown.

The return of the negotiations?

Everywhere, registrations are increasing, the number of transactions is decreasing…

And while prices are still holding up for now, he sees a change in buyer sentiment.

“Recourse to superiority is no longer automatic. Even that, more and more, some negotiate and no longer hesitate to submit offers lower than the price shown. [5 à 10 %]something we haven’t seen in years,” she says.

Put in perspective…

For some sellers, this new reality can be harshly received. Does Mr. Melançon worry? Not really. On the contrary, he claims to be sure that the price established for his home reflects the current market and specifies that his sale is not made in an emergency context.

“If it’s not this year, it will be next year”, he says, before adding the following relativistic reflection: “don’t forget that whoever agrees to sell less today should, in principle, be able to buy less again. »

The ebb is accelerating in the metropolis and the national capital

The province’s housing markets, like those in the Montreal and Quebec metropolitan regions, continue to show signs of an accelerated slowdown.

The latest data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ) shows a 15% drop in the number of transactions in July, compared to the same month in 2021.

If prices continue to rise in Quebec, by around 12% on average, the number of residence listings for sale is 13% higher than the same time last year. A cocktail that could herald a possible slowdown, or even stagnation, in property price growth here.

“In continuity with what was recorded in June, the change in market dynamics is clearly confirmed,” said Charles Brant, Director of the APCIQ Market Analysis Department. The magnitude of the rise in interest rates, in just 4 months, accelerated the slowdown in the market. »

Free fall in Montreal and Laval

The Montreal metropolitan area saw an 18% drop in transactions in July, compared to last year, and a 28% increase in listings during the same period. However, prices continue to rise: 10% in July, compared to 17% since the beginning of the year.

The cities of Montreal and Laval are showing the strongest signs of a slowdown in the region with sales volumes down 29% compared to July 2021. Active listings are up 18% (including 54% for single-family homes) in Montreal and 13% Laval.

Signs also in Quebec

The Quebec metropolitan region presents a portrait that differs in appearance from the rest of Quebec. It is one of the few markets in the country to see an increase in sales compared to last year.

Its sales have increased by 1% and its prices are 15% lower than last year. However, explains the APCIQ, this activity is explained in part by the absorption of a growing inventory of real estate for this time of year.

“Although this increase will need to be confirmed in August and September to speak of a trend, it is a harbinger of a slowdown in the market and much weaker growth or price stabilization in the coming months,” Mr. Brant endorses.

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