The mortgage rules seem to be slowing the market – but perhaps a little too much for one seller's market.
Having been a hot market for the past six months, Montreal is just one of the major cities now being hit by the more restrictive lending protocol. In the Royal LePage Q3 House Price Survey released yesterday, the sale of Montreal properties had slowed so much that the market is now one that favours buyers.
According to Royal LePage, Flaherty’s reduction of the amortization period is to blame for the downturn in sales and, very soon, prices.
“We don’t believe these measures were necessary,” said Dominic St-Pierre, director of Royal LePage for the Quebec region. “Price softening should be felt in the coming months, especially in condominiums.”
While residential prices were up slightly in the last quarter, which was consistent with many cities across the country, they are expected to dip by the end of the year going into 2013. The condo market will take a particularly hard hit, as a significant increase in inventory benefits the bargaining position of buyers.
That phenomenon is expected to reverse this year’s value gains, eroding the average price of a detached bungalow now sitting at $287,500. The average two-storey home sits at $387,786, with its condo counterpart at $236,989.