MONTREAL | The real estate market had continued its momentum during the first quarter of the current year, but the health crisis has put a dent in the sales, and the enthusiasm has temporarily evaporated.
The professional Association of real estate brokers in Quebec (APCIQ) already looks to 2021, where it anticipates a rebound of 25% of the number of transactions, compared to 2020, as well as a price increase of 6% to 10%, depending on the types of properties.
But everything will depend on the economic recovery and the possibility of further waves of infection of the disease due to coronavirus.
The APCIQ believes that the resale market in Québec will be in a position this year to absorb the shock of the crisis without any significant drop in prices”, a-t-on said in a press release.
If 2019 was recorded under the sign of the trust and that the first quarter of the current year had registered an increase of 18% in the number of transactions compared with 12 months earlier, the state of the market is another five weeks after the start of the pandemic, since Quebec is, what’s more, the province most affected by the COVID-19 in the country.
Social distancing requires, the number of transactions is clearly on the decline now, the sellers have reviewed their priorities. For a good number of Quebecers who wished to move, this is not the time to make boxes.
Record loss in the second quarter
According to the APCIQ, the measures put in place by the government Legault on the 13th of march last, while Quebec was on break, will cause a “record loss” of 60% of sales in the second quarter compared to the same period of 2019.
The Association anticipates a “sharp drop in sales” and “a fall equally strong new entries”, but this “freeze of the market should allow for a stability of prices in the second quarter”.
“The rapid decline in economic activity, the massive loss of jobs and the limited understanding of the COVID-19 and of the evolution of the pandemic makes it an environment particularly difficult for market forecasts”, said Charles Brant, director of market analysis at the APCIQ.
“The variability surrounding the projections is wide and depends as much on the impact of medical discoveries that will be made on the virus that the public’s attitude to the evolution of the pandemic as well as the decisions of governmental authorities to respond to the evolution of the situation,” he continued.
The APCIQ table and on a gradual recovery by the fall, but it is the next year that the activity would resume. It is based on two scenarios as a framework of estimates. The first is the reference scenario and the second is a pessimistic scenario.
The slowdown in housing market and sales, however, could lead to a year-end “hot” on the plan of the transactions.
“The conditions of the quebec market could quickly back to their equilibrium level until the autumn; during the second semester 2020, a limited drop in median price should be recorded in several geographic areas, which will present buying opportunities,” said Charles Brant.
For all of 2020, the latter bet on a significant decline of 22% in sales compared to the record sales achieved in 2019, as well as a decline of 2% to 4% in median prices, according to the categories of properties.