February 2022
Desjardins Economics recently published a quarterly update on the housing market. Here are the highlights:
- Desjardins notes that, in the resale market, rapidly rising prices affected the six major urban centres in Quebec, especially Gatineau, Sherbrooke and Trois-Rivières.
- In Quebec and Ontario, the inventories of property for sale remain extremely low. Ontario is only showing a number of months of inventory of less than two months of sales.
- The analysis notes that the role played by investors is growing and pushing up prices, which is detrimental to new homeowners. However, this phenomenon is limited in Quebec (13.8% of property purchases in the second trimester of 2021) compared to the rest of Canada (21.6%), this data suggests that there is an important presence of investors in the Ottawa-Gatineau area (25.5%), and that Montréal’s market is closer to the Canadian average with 18.9% of transactions during the second trimester of 2021.
- In the resale market, Desjardins predicts an 8.3% decline of transactions and a 6.5% increase of the weighted average price in 2022 and warns of a risk of there being a price adjustment in 2023 in the already overvalued markets fuelled by stronger investor demand, such as Montréal, Ottawa and Toronto.
- The forecasted scenario for policy rate increases, in early February, was 1.75% for the end of 2022 (it has since been changed to 1.25% for the end of 2022 and 1.75% for the end of 2023).
- For new constructions, Desjardins predicts a lull in 2022, following a strong start in 2021. The current prediction is of around 55,000 new homes in 2022 and 52,000 in 2023, compared to 67,810 in 2021. Rising interest rates could particularly affect the new construction of single-family homes, but activity should remain strong in the rental sector.
To view the full note, click here.
The French version is also available here.
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Head office
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Administrative offices
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