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Home Business Supply and demand are driving up home prices, says real estate sales...

Supply and demand are driving up home prices, says real estate sales expert

Royal LePage stats show Laval, North Shore prices up 13.7 and 21 % respectively

The Royal LePage House Price Survey and Market Survey Forecast released last week revealed signs of a shift to a healthier real estate market for the first time since the onset of the pandemic early last year.

But at the same time, sales figures for the Laval and North Shore regions showed property sales prices steadily going up. As the number of available properties declined, demand remained constant, thus fueling price increases.

According to the survey, aggregate home prices in Laval rose 13.7 per cent from Q3 2020 to Q3 2021 (1 July- 30 Sept.). Aggregate homes prices in the North Shore region went up 21 per cent during the same period.

Supply and demand

“Demand for Montreal’s suburbs continued to grow significantly in the third quarter, which explains the upward pressure we are seeing on home prices in Laval,” Georges Gaucher, manager of Royal LePage Village in Montreal, said in an e-mailed response to questions from Newsfirst Multimedia.

Royal LePage Village’s Georges Gaucher.

“Inventory of homes for sale remains at record lows in the region, pushing home price appreciation further,” he added, while noting that Laval’s real estate is catching up on price appreciation.

“Before the pandemic, the rate of home price appreciation in Laval was more moderate, falling behind many Montreal neighbourhoods,” he continued. “Over the last few months, the North Shore of Montreal and Laval have been among the most in demand areas for residential properties, and consequently where property prices increased the most.”

A countrywide trend

According to the report, Canada’s national aggregate home price increased 21.4 per cent year-over-year in the third quarter. Royal LePage predicts that the national aggregate home price will rise 16 per cent in Q4 2021.

If that forecast is reached, the aggregate price of a home in Canada will have increased 33 per cent by year’s end and since the start of the real estate recovery in June of 2020.

As anticipated in the second quarter, the summer market gave way to a slowdown in activity and price increases in several sectors. The survey said the aggregate price of a property increased 20.8 per cent year-over-year to $517,200.

Signs of a slowdown

The median price of a single-family detached house rose 20.0 per cent to $571,400, while the median price of a condominium rose 12.2 per cent to $410,400 in the third quarter of 2021. The pricing data includes both resale and new construction properties.

‘Demand for Montreal’s suburbs continued to grow significantly in the third quarter, which explains the upward pressure we are seeing on home prices in Laval’

“Signs of a slowdown that we had anticipated were confirmed during the third quarter,” said Dominic St-Pierre, vice-president and general manager of Royal LePage in Quebec. “Quarter-to-quarter price changes have fallen to their lowest rate since the start of the pandemic, below one percent, whereas the increases of the previous quarters had varied between 5 and 10 per cent.”

In terms of sales, St-Pierre said single-family home transactions in the Greater Montreal Area were down 37.2 per cent in the third quarter of 2021 compared to the third quarter of 2020, while condominium sales fell 22.3 per cent over the same period.

Royal LePage House Price Survey Data
Greater Montreal Area – Third Quarter 2021

Single-family detached house
RegionMedian PriceQ3 2021Q3 2021 – Q2 2021 Change (%)Q3 2021 – Q3 2020 Change (%)
Montreal Centre$1,060,5001.0%19.2%
Montreal East$546,5004.3%15.0%
Montreal West$742,2000.6%15.7%
Laval$531,4001.2%17.7%
Montreal North Shore$430,0001.8%23.0%
Montreal South Shore$522,7001.3%21.4%
Greater Montreal$571,4002.2%20.0%
Condominium
RegionMedian PriceQ3 2021Q3 2021 – Q2 2021 Change (%)Q3 2021 – Q3 2020 Change (%)
Montreal Centre$502,2000.3%8.8%
Montreal East$425,0000.0%8.3%
Montreal West$410,4002.6%14.8%
Laval$338,5000.3%14.4%
Montreal North Shore$307,9003.9%27.7%
Montreal South Shore$330,900-1.2%15.3%
Greater Montreal$410,4001.3%12.2%
Aggregate
RegionMedian PriceQ3 2021Q3 2021 – Q2 2021 Change (%)Q3 2021 – Q3 2020 Change (%)
Montreal Centre$648,7000.9%12.5%
Montreal East$499,700-1.0%9.2%
Montreal West$652,5003.1%14.5%
Laval$468,8000.8%13.7%
Montreal North Shore$426,8002.5%21.0%
Montreal South Shore$489,9002.5%17.8%
Greater Montreal$517,2000.6%20.8%
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