According to the Quebec Federation of Real Estate Boards (QFREB), the number of sales completed over asking price has been increasing in all metropolitan areas in Quebec over the past year. Data on ‘months of inventory‘ showed the strongest relationship with selling price – in areas with the lowest number of months of inventory, more properties sold above their asking price.
Overall, Québec’s real estate market is off to a good start in 2018, with resale transactions increasing by 7%, and supply falling by 9%. All statistics point to a tightening market, including the number of months of inventory dropping in all census metropolitan areas without exception. The shift towards a seller’s market has put upward pressure on selling prices, and has increased the occurrence of bidding wars.
Proportion of sales concluded above the asking price, by census metropolitan area
Sales over asking price were most prevalent among ‘plexes (small rental buildings with two to five dwellings) in Montréal, Québec City, Sherbrooke and Trois-Rivières CMAs. In Montreal, single family homes sold more frequently above asking price than condos, even though condos have seen the highest jump in their sales growth.
Montréal is the only CMA in the province that is firmly in a seller’s market
Sales above asking price were more common in Montreal than any other CMA. Island of Montreal has recorded the lowest number of months of inventory, and the tightest market conditions in Quebec.
The proportion of sales concluded above asking price varied according to geographic area and property type.
For single-family homes, Rosemont-Petite Patrie recorded the tightest market conditions, where almost one in three homes sold above asking price (32%). Pointe-Claire also stood out with 31%, Kirkland with 26%, and Beaconsfield with 25%.
In the condominium market, fewer properties sold above asking price, because there is less scarcity in that sector. Nevertheless, Le Plateau-Mont-Royal (16%), Rosemont/La Petite-Patrie (16%), Villeray/ Saint-Michel/Parc Extension (14%), Outremont (14%) and South West (12%) recorded a notable amount of condos selling above their asking price.
‘Plexes are by far the most popular property type in Montreal – in certain neighbourhoods, almost a quarter of all ‘plexes sold were concluded above the asking price. Specifically, Verdun/Île-des-Sœurs, Rosemont/La Petite-Patrie, South West and Le Plateau-Mont-Royal showed high numbers, ranging between 26%-28%.
How much above the asking price are properties selling for?
QFREB calculated the amount in dollars and as a percentage of the asking price for each CMA, based on all transactions recorded on Centris.
The Montréal CMA registered the largest difference when measured in dollars – buyers involved in bidding wars paid on average $15,072 more than the asking price.
The average difference between sold price and asking price was most in Québec City at 3.7%, followed by Montreal at 3.5%.
Will the market keep tightening?
QFREB will closely monitor the situation in Quebec over the next few months, to ensure that the market does not become overheated.
Despite an excellent forecast for 2018, it is unlikely that the phenomenon will increase significantly in the short term. Nevertheless, single family homes and plexes will remain a rare commodity and are likely to keep putting an upward pressure on prices. In certain neighbourhoods, condos are also expected to see their day as demand overtakes supply.
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