Real Estate 2023: 5 trends that will shape the Montreal market
In 2023, the real estate market will be radically different from what it has been for the past two years. Today, there is constant talk of recession and rising interest rates. However, not everyone understands the impact of these factors on the Montreal real estate market. Whether you’re thinking of buying or selling, it’s important to stay on top of trends to make the best decision. Here are the 5 things to watch for in real estate in 2023.
Interest rates will play a major role in the housing market in 2023
Rising interest rates have a direct impact on real estate prices. When rates rise, buyers have to spend more money on their mortgage payments. This reduces their purchasing power. As a result, the demand for real estate tends to decrease, which leads to lower prices. It is important to keep in mind that real estate is a long-term investment, and small changes in interest rates usually do not have a major impact on long-term property values.
How are interest rates determined?
How are interest rates determined? Contrary to popular belief, interest rates are not set randomly. The Bank of Canada sets the key interest rate. This rate has a direct influence on whether the interest rates of the major banks go up or down. In general, when the key rate goes up, the rates offered by the major banks also go up.
More affordable homes in Montreal in 2023
Have you been waiting for the market to cool down to buy a coveted condo on the Plateau? 2023 will be your time to invest. According to TD Bank, we should see a drop of up to 25% in house prices. For Desjardins, the estimate is more conservative with a drop of about 15%. One thing is sure, the amount to pay for properties will not return to what it was before the arrival of the pandemic. With inflation soaring and interest rates rising, this has contributed to the drop in prices.
Rising mortgage rates will keep outbidding
If there’s one thing buyers will remember from the past two years, it’s overbidding. Many buyers have found themselves paying well over the asking price for their dream home. Investors were making numerous concessions to get the house on the property they wanted. This reality is expected to diminish as mortgage rates and the policy rate rise. If home prices are more affordable, making the monthly payments will be more difficult for buyers. As a result, fewer buyers will be looking to purchase a home, and those that do will be more cautious with their budgets.
More bidding in the regions next year?
Telecommuting is no longer just a fad, it is now the norm. More and more people are looking for homes outside of Montreal to find more affordable prices. Not to mention the fact that many people are looking to get away from the big cities to recharge their batteries. If you are thinking of moving out of the city, it is important to shop around. The addition of new residents in sparsely populated areas can quickly change market conditions and create a bidding war.
For sellers, it is better to wait for the recovery
Real estate is always a long-term game, and patience will be your best weapon as a seller in 2023. Despite a drop in homes price, they are expected to rise again by 2024. Fewer buyers will be in the market, making it harder to get your property on the market. If you can wait for the market to rebound, you will be in a much better position for your home at a good price. One thing is for sure, in a competitive market like Montreal, you will always need a good real estate broker on your side.
Want to buy or sell at the right price without too much hassle in 2023, contact Samia
By the end of 2023, housing prices are expected to stabilize and even decline. For those considering selling their home, it might be best to wait until the year after. If before, we were in a seller’s market, now the advantage will be in the buyers’ camp. For those who have been waiting for a market correction to buy, now is the time. To succeed in your real estate transaction, it will be, as always, important to be well-accompanied. With over 20 years of experience, I have seen recessions. Don’t wait and contact me to buy or sell your property quickly and easily.