As a result of the growth in the Quebec real estate market, the province is increasingly becoming a sought-after location for investors. Brimming with astounding natural landscapes, an ever-evolving tech scene and some of the most welcoming natives in the world, Quebec has positioned itself as a prime location in Canada. Quebec, particularly Montreal, has a growing French population. Despite this, it remains an excellent location for locals and foreign nationals seeking opportunities to invest in Quebec properties. Additionally, it attracts students and individuals awaiting their Canadian permanent residence.
This blog delves into various aspects of the Quebec real estate market and what makes it a hotspot for investment.
What Attracts Investors to the Quebec Real Estate Market?
Employment statistics in Quebec have made it an extremely attractive and desirable location. Therefore, the Quebec housing market may appeal to those hoping to make a smart move to upgrade their professional lives. Regarding personal lives, there is a seemingly perennial supply of museums, heritage sites, gardens, galleries and more. It may appeal to those looking to indulge in interesting activities.
Factors of Investing in the Quebec Real Estate Market
These factors have a major impact on the Quebec real estate market:
Property Pricesย
One main reason for rising property prices is that household incomes in Quebec have been catching up with other provinces, allowing people to afford higher prices. Additionally, thereโs a limited supply of houses for sale in Quebec, especially in major cities like Montreal. This shortage intensifies competition among buyers, pushing prices up.ย
Moreover, strong demand for homes, driven by buyer confidence and expectations of lower interest rates, adds pressure. While borrowing costs remain high, buyers who can afford it are willing to pay more, making it an attractive opportunity to invest in Quebec property.
Costs Incurred while Acquisition and Maintenance of Properties
Prospective buyers must consider several costs before acquiring their dream home in the current Quebec housing market. However, laying claim to your property can be fairly simple with planning and preparation. Knowledge of the rules and regulations involved in covering costs is a must before investing in a Quebec property. Furthermore, figuring out how to finance efficiently to cover these costs makes the process much easier.
Buyers must consider costs like appraisal, building inspection, property surveys, and legal and notary fees. They are also required to pay for several kinds of insurance, including mortgage loan insurance, title insurance, and home insurance. Furthermore, buyers must pay land transfer tax, sales tax, and more.
Residency and Acquisition of Properties Based on Citizenship
The Quebec Immigrant Investor Program, launched in 1986, has seen major changes over the years, especially in investment thresholds. Initially, the required investment was CAD$400,000, which increased to CAD$800,000 and CAD$1.2 million.ย In 2024, the program was relaunched with new requirements. It allows business people and their families to gain permanent residency in Quebec without conditions. In exchange, the investment contributing to Quebec real estate investing supports small and medium businesses in the province. To qualify, applicants must meet certain criteria:ย
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- Must have intermediate French language skills (Level 7)
- Must have business experience
- Own a net worth of at least CAD$2 million
- Provide proof of where the investment money comes from
- Plan to live in Quebec
Housing Market in Montreal
The 2024 Montreal real estate market is showing promising signs of growth, making it an attractive time for buyers. Since the year began, interest rates have stabilised, and buyer confidence is rising. The Bank of Canadaโs decision to maintain stable interest rates has made financing more accessible for many, with mortgage rates hovering around 5%.ย Sales in January 2024 increased by 8% compared to the previous year, indicating a positive market trend. These factors create favourable conditions for those looking to invest in property early in the year.
Property forecasts predict a price increase of 3% to 5% by year-end. As more buyers enter the market, competition intensifies, potentially driving prices higher. Those who purchase before summer can take advantage of lower prices and favourable mortgage rates.
Valuable Insightsย ย
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- This profusion in the country and the Quebec housing market, in particular, is a first since the year 2015.ย
- Listings available on the market reached a high of 12,370 units, which comes in as a 15% increase from what the market witnessed in June 2021.ย
- The median price of single-family homes reached a peak of $570,000, which is a 12% increase in June 2021.ย
- The prices of single-family homes have experienced a $6,000 decrease from May 2022.
- The median price of condominiums in the city experienced a 12% increase over the year, costing about โโ$365,000 in June 2021 and $410,000 in June 2022.ย
It is interesting to note that the selling time for most properties has either stagnated or gone up since last year. Condominiums, however, seem to have gained speed. It previously took 35 days to sell condominiums in the Quebec Housing Market, which are now moving in 30 days.
Housing Market in Quebec City
The housing market in Quebec City offers a mix of historic charm and modern living. Buyers can find a variety of property types, including single-family homes, condos, and townhouses. Prices are more affordable than in larger cities like Montreal, making it attractive for first-time buyers and families. Quebec City’s real estate market remains stable, with demand driven by its rich cultural heritage, excellent amenities, and quality of life. Rental properties are also available, catering to students, professionals, and tourists.
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- The average home price in Quebec rose by 4.1% compared to last year, reaching $487,500 in August 2024.
- The price of a single-family home in Quebec increased by 4.1% over the past year, reaching $547,400 in August 2024.
- The price of townhouses or multiplexes in Quebec increased by 1.5%, with the average selling for $547,500 in August 2024.
- Condos in Quebec experienced a 3.6% price increase, now averaging $382,900 in August 2024.
- Rent prices in Quebec increased by 2.0% from last year, with the average rent being $1,962 in August 2024.
- In the second quarter of 2024, sales of plexes grew by 21%, with the median price reaching $603,500.
Will Quebec Be a Buyerโs or Sellerโs Market in 2024?
According to the Quebec Professional Association of Real Estate Brokers (QPAREB), the Quebec real estate market recovered in early 2024 with increased buyer confidence and better market conditions. Quebec City is currently experiencing a seller’s market, with a sales-to-new-listings ratio (SNLR) above 60%, which means sellers have the upper hand. This is due to low inventory levels combined with strong buyer interest. Residential sales grew by 12% in the second quarter compared to 2023, driven by demand in regions like Drummondville, Sherbrooke, Gatineau, and Montreal. Sales of single-family homes, condos, and plexes saw significant growth, with prices rising by 11%, 10%, and 21%, respectively.
Economists note that rising household incomes in Quebec have increased property prices. However, buyers still face challenges like limited inventory and high interest rates. Despite these issues, Quebecโs real estate market remains resilient and optimistic about future growth. The Bank of Canada cut interest rates, offering more opportunities for buyers, but inflation and high prices still pose barriers for many. Recreational areas like Estrie, Laurentides, and Lanaudiรจre are attracting more buyers for second homes. Sales in regions like Lachute and Rawdon rose significantly. Due to rental income potential, plexes have gained popularity, especially for first-time buyers and investors.
While Quebec has seen positive trends, the overall Canadian real estate forecast was revised down to 6.1% growth. Economists expect interest rates to fall to 4% by the end of the year, which may create more buying opportunities.
In Conclusion
The Quebec real estate market in 2024 is experiencing growth, making it attractive for investors. Rising household incomes, low unemployment, and stable interest rates increase property prices, especially in Montreal and Quebec City. Despite high interest rates and limited inventory, strong buyer demand and favourable conditions drive the market, particularly in recreational areas. This makes Quebec a desirable location for local and international real estate investments.
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Frequently Asked Questions (FAQs)
Yes. You are required to pay taxes on real estate commissions in Quebec. These include two kinds of taxes: QST (provincial) and GST (federal), worth 9.975% and 5%, respectively, totalling 14.975%.
In Quebec, the real estate broker licence cost includes an initial application fee of $1,550, which covers registration with the OACIQ (Organisme dโautorรฉglementation du courtage immobilier du Quรฉbec). Brokers must also pay for mandatory professional liability insurance, which costs around $500 annually. Fees for ongoing education and other administrative costs may apply.
Prospective real estate brokers who hope to practice the profession in the region of Quebec need to successfully complete the mandatory training program in an educational institution recognised by OACIQ, pass the OACIQ certification examination, and fill out a consent form for the verification of their criminal record.
A real estate contract signed by the buyer and seller can only be cancelled if both parties unanimously agree. If a consensus is reached, both parties can sign a written cancellation agreement that would void their previous contract. However, consulting a notary before any document is signed is advisable.
Real estate agents from one province must meet the licensing requirements of another province before practising there. These include completing the necessary training, gaining relevant experience, and passing exams specific to that province's regulations. Is there a tax on real estate commissions in Quebec?
How much does a real estate broker license cost in Quebec?
What is required for a real estate license in Quebec?
Can a buyer cancel a real estate contract in Quebec?
Can Ontario real estate agents buy or sell a house in Quebec?
