Despite the slowdown, the share of purchases of luxury properties, or those priced well above Quebec’s average price, has increased significantly since the pandemic.
In Montreal, for example, transactions of houses priced above the $900,000 threshold have practically doubled since 2019, according to the Quebec Professional Association of Real Estate Agents (APCIQ). While they accounted for 17% of transactions in 2019, their share has now been 31% since the beginning of 2023.
2x more
The share of single-family homes worth $900,000 or more in Montreal doubled between 2019 and 2023 (Source: APCIQ)
The same trend can be observed in the Quebec market, but with even greater intensity. In fact, transactions involving a single-family home worth $700,000 or more in Quebec have more than quadrupled since the start of the pandemic. They rose from 2.5% of total transactions in 2019 to no less than 11% in 2023.
4x more
The share of single-family homes valued at $700,000 or more in Quebec quadrupled between 2019 and 2023. (Source: APCIQ)
According to economist Charles Brant, director of market analysis at APCIQ, this situation is mainly explained by an unusually rapid growth in the number of wealthy households in Quebec in recent years.
Economist Daren King of the National Bank in Montreal cannot confirm such a claim with supporting figures. “However, we know that many have taken advantage of the pandemic to repair their finances and generate excess savings. This probably also applies to those who were already doing better.”
Saguy Elbaz Team, Sotheby’s International Realty Quebec
New millionaires
Charles Brant primarily refers to households that already owned a property before property prices exploded by 2022. From February 2000 to today, the average price of a single-family home in Quebec has increased by 53%, something never seen before, he says, allowing countless owners to get rich very quickly in recent years.
53%
Percentage of growth in the average price of a single-family property in Quebec since February 2020. (Source: APCIQ)
Entrepreneurs in the renovation and construction industry who have taken advantage of the shortage of recent years and fully invested in the “flip” industry [achat et revente rapide] Many have experienced the joys of getting rich quick.
According to the APCIQ economist, the same applies to several real estate professionals who work at the interface between real estate management and the digital economy. Short-term rental platforms like Airbnb, Vrbo and even Marketplace have taken advantage of the complete lack of oversight and legal oversight in this industry and helped create dozens of other millionaires in Quebec.
Finally, in his opinion, there are a multitude of other digital artisans (visual effects for cinema and video game industries) and research experts in the field of artificial intelligence who would likely fill the ranks of these nouveau riche who can afford these increasingly numerous prestigious properties ($900,000 and more).
However, unlike long-term wealthy families, they appear to be much more sensitive to rapid fluctuations in mortgage rates. Thanks to the banks’ accommodative policies, the worst has been avoided for the time being, experts say. But the proliferation of distressed sales by cornered owners remains a possibility in the coming years.