The correction gradually fades away
The year 2023 marked a historic low. Residential transactions fell to 75,853, 10,995 fewer than in 2022. The phenomenon of multiple offers and overbidding, which characterized the pandemic, evaporated in a few months. Buyers have found time to visit, compare and negotiate.
The geography of this correction tells two stories. On the island of Montreal, several sectors held up. Saint-Laurent even saw its sales increase by 21%. On the other hand, the periphery has suffered a number of setbacks: Saint-Lambert (-35%), Saint-Constant (-29%). The winning recipe remains the same as before: proximity to services, access to public transport.
However, as early as autumn 2024, the tide changed. Sales rebounded between 9% and 16% depending on property categories. Sherbrooke stood out with an increase of 26%, followed by Saguenay, Montreal and Quebec City, all up by more than 13%.
Ottawa and the Bank of Canada are moving
The Bank of Canada hit a major blow on September 17 by lowering its key interest rate to 2.50%. Variable mortgages went from 3.95% to 3.70%, freeing up to $84 per month for average borrowers. Analysts expect a further decline to 2.25% by December 2025.
These declines come after two difficult years in which young buyers and professionals were driven out of the market. The first effects are already being felt: sales increased at the end of 2024 compared to the same period in 2023.
On the federal side, the GST exemption announced in March is changing the situation for first-time buyers. Those who buy a new property worth $1 million or less will no longer pay this tax. The savings can reach $50,000. For properties between 1 and 1.5 million, a sliding discount applies. One condition: not to have been a homeowner in the last four years.
The accessibility conundrum persists
The numbers speak for themselves. A Montreal couple earning $76,000 per year can borrow about $260,000. The median price of a condo is around $425,000. So $165,000 is missing. The Bank of Mom and Dad must therefore very often fill this gap.
Disparities between neighborhoods are widening. In Rosemont, the average condo costs $592,881. In Hochelaga, we still find $426,524. Laval offers the best value for money near the metro, with a median of $386,333. These high prices are holding back construction. There are 30,000 units under construction compared to 40,000 in 2022. Immigration continues to fuel demand, but supply is not keeping up.
What awaits the market in 2026
All the ingredients for a recovery are there. Rates are falling, Ottawa is giving a fiscal boost and confidence is back. The number of sales is expected to continue to increase, even if it will not return to the artificial peaks of 2021.
It remains to be seen how external factors will play out. Trade tensions with the United States, possible changes in immigration thresholds, global economic stability: all unknowns that can slow the momentum.
One thing is certain : the Quebec condo market is coming out of its adjustment period. Buyers who have waited since 2022 are finally seeing openings. Sellers, on the other hand, understand that they will have to deal with a more balanced market than when everything sold in just a few days.
