Real estate in Quebec: a market that is on fire

Quebec is in turmoil with a spectacular 62% increase in home sales in August. New home construction is not to be outdone and also jumped 18% for the first six months of the year.

The resale market continues to rebound since deconfinement. According to the Professional Association of Real Estate Brokers of Quebec (APCIQ), 831 properties were sold during the month of August in the Quebec City metropolitan area, an increase of 62% compared to August 2019. He this is the strongest growth of the six metropolitan regions in Quebec.

“It’s more than catching up, we are ahead of last year. That surprises us. We did not expect with the pandemic to surpass results in 2019, which had been a rather exceptional year. We are very happy, ”said Julie Saucier, President and CEO of the APCIQ.

“We are currently studying whether the behavior of buyers is changing. Are people willing to move much further away because they know they’re going to be telecommuting a few days a week for a few years? Do they want an extra room to make a home office? We can see that there might be a trend, ”she added.

Buildings by the ton

In the first six months of the year, there were 2,462 housing starts (+ 18%) in the Capitale-Nationale and 782 (+ 12%) in the Chaudière-Appalaches region, compared to the same period in 2019 .

On its own, for example, the municipality of Saint-Raymond, which has a population of 10,800, has seen an increase of 39%.

“Us, it’s going well. We are in full expansion. We feel that there is a craze for nature and the outdoors. With telecommuting, people no longer need to live downtown. There is land on the market for $ 70,000 or $ 80,000. For small families who have a little tighter budget, it allows them to have their own home, ”says Mayor Daniel Dion.

The mayor is also asking the government for access to Highway 40 to avoid a detour through Pont-Rouge or Sainte-Catherine-de-la-Jacques-Cartier, which are also experiencing an increase in their population.

Single-family request

According to the Association of Professional Construction and Housing of Quebec (APCHQ), the construction of single-family homes and the construction of rental housing were both very dynamic, with respective gains of 21% and 20%.

The condominium construction market is proving to be anemic with only eight starts in the first half of the year.

“Normally, what got up in the first six months of the year were projects that had been in the pipeline for some time,” underlines Paul Cardinal, director of the APCHQ’s Economic Department.

Domination

Housing for the rental market once again dominates new residential construction. In the Capitale-Nationale, 1,838 rental units started for the first half of the year.

“It’s a very popular market. When we look at the vacancy rate, it is still very low in Quebec City. So there is room to build new rental projects, ”continued Mr. Cardinal.

Exceptional mortgage rates

Homebuyers can benefit from historically low mortgage rates.

In some cases, it may even be advantageous to terminate your contract to negotiate a new one, even with the penalty, according to André Petit, broker at Multi-Prêts.

“The posted rates are exceptional. It’s crazy how low it is. We are talking about a rate of 1.89% for a closed five-year term, and we can even go down a little further to around 1.79%, ”says Mr. Petit.

He observes that buyers are going so far as to advance their acquisition project in order to benefit from such rates.

“I’ve been a mortgage broker for 20 years, and as low as that, I’ve never seen this for a fixed term of five years,” he says.

Banks compete fiercely to attract borrowers.

“We were in a slightly more upward trend before all of this happened,” said the broker, referring to COVID-19.

The months of March and April were particularly quiet for lenders. Recipients of the Canada Emergency Benefit could not qualify with the banks.

“In early May, activity resumed. We had a summer like we’ve never seen before, ”said Mr. Petit.

Several factors

“There are all kinds of little things that have happened. There are couples who have noticed that it no longer works. We have seen separations. Monsieur redeems Madame’s share. Madame buys herself another house. There were those who found their condo too small to work from home. They sold it to buy a semi-detached. This is all that makes things happen a lot in the market. ”

This has the effect that the banks, which still have a lot of staff teleworking, are overwhelmed, he said. Processing times can be up to 12 days.

“Banks are looking for people,” added the Multi-Prêts broker.

The volume is also caused by mortgage holders who want to renegotiate at a lower rate.

“We get a lot of requests for that. Someone who signed at 3.49% a year and a half ago wants to take advantage of that rate. It always depends on the financial institutions and the penalty people will have to pay. ”

Five-year promotions even offer cash back. As long as the COVID-19 pandemic is not resolved, interest rates could remain advantageous, believes the broker.

Number of housing starts by sector

  • Québec : 1946 (+8 %)
  • Saint-Augustin-de-Desmaures: 249 (+ 500%)
  • Saint-Raymond : 43 (+39 %)
  • Stoneham-et-Tewkesbury : 35 (-17 %)
  • The Guardian Angel: 33 (+ 500%)
  • Lévis : 512 (+8 %)
  • Saint-Georges: 143 (+ 38%)
  • Sainte-Marie: 85 (52%)

* Data for the first 6 months of 2020 and increase compared to the same period in 2019.

Source : APCHQ

Value of building permits for the first six months of the year

  • Capitale-Nationale: $ 464 million (+ 21%)
  • Chaudière-Appalaches: $ 286 million (+ 26%)

Source : APCHQ

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