The Quebec Professional Association of Real Estate Brokers says September home sales in the Montreal area fell by 28 percent compared with a year ago as the market continued to edge toward pre-pandemic levels.
The association says 3,671 homes were sold last month in the area, down from 5,120 in September 2020.
New listings for the month also dropped from 7,499 last September to 5,818 last month.
Median prices continued to rise sharply in September, reaching $504,500 for single-family homes, $365,000 for condominiums and $690,000 for plexes.
The association says the Montreal real estate market is still showing significant overheating conditions, but the proportion of sales concluded above the asking price has weakened over the past five months.
The association says this trend is being reflected in a reduction in the number of buyers making an offer on the same property.
The news comes as the CMHC suggests that Canadian real estate is highly vulnerable thanks to price hikes and overvaluations.
Canada Mortgage and Housing Corp. said the country’s housing sector moved from a moderate to a high degree of vulnerability during the second quarter, with Toronto, Ottawa and Montreal among the markets shouldering the most risks.
The federal housing agency attributed the escalation in vulnerability to price acceleration and overvaluations across the country and said the shift was largely a reflection of intensified and persistent imbalances in several local housing markets across Ontario and Eastern Canada.
“Even though we’ve seen a little bit of a moderation in some of the housing market statistics in the third quarter when looking at the second-quarter results … activity was still much stronger than even it is today,” said Bob Duggan, CMHC’s chief economist.
“Housing market activity is very strong, price growth is still very strong and price levels are very high.”
Mr. Duggan and CMHC’s quarterly assessment released Tuesday assigns low, moderate or high vulnerability ratings to the entire country and 15 major cities based on four factors: overheating, price acceleration, overvaluation, and excess inventories.
If those factors become imbalanced or risk increases in several areas at once, the agency posits that markets could be more vulnerable to troubles and people could begin struggling with their mortgages.
CMHC’s second-quarter assessment of the Canadian market found moderate degrees of vulnerability when it examined the country’s risks of overheating, price acceleration and overvaluation.
It found a low level of vulnerability linked to the country’s excess inventories rate but still gave the country a “high” vulnerability ranking overall.
In the two prior quarters, Canada’s housing market landed a “moderate” degree of vulnerability, but Mr. Duggan warned of pressure from rural areas like Ontario’s cottage country and the Niagara, Bancroft and North Bay regions, which don’t receive vulnerability ratings but contribute to the national analysis.
“A lot of the movement of people has been from some of the major urban centres to outside the major urban centres and some of the strongest price growth earlier this year was really experienced in smaller … and rural communities,” Mr. Duggan said Tuesday.
CMHC’s individual market assessments for the second quarter showed Toronto, Hamilton, Ottawa, Montreal, Moncton and Halifax have high degrees of vulnerability.
All of those markets were ranked high in the prior quarter, except for Montreal, which was previously assessed as moderate and is seeing overvaluation becoming a more pressing issue.
CMHC kept Victoria, Edmonton and Calgary at the moderate level they were at before, while Vancouver, Saskatoon, Regina, Winnipeg and Quebec City were assessed as having low degrees of vulnerability.
The low ranking was new for Vancouver, which was previously said to have a moderate vulnerability level.
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