July marked a significant shift in the Montreal real estate market particularly for the single family home sector.
With big interest rate hikes in May and again in June, this slowdown was expected but the most recent numbers are a bit of an eye opener for both buyers and sellers. 

Montreal’s West Island single family home prices took a nose dive in July falling by 12% compared to June with the median price of a single family home now up just 0.2% from July 2021 and sitting at $704,000.

The number of sales fell by 30% month over month and the number of homes on the market increased by 9% compared to June and were up by 84% compared to July of last year.

There is now 5.2 months of inventory which is firmly in balanced market territory and not far from a buyer’s market which would be over 6 months of inventory. 

As we predicted last month, less buyers entered the market and pre-qualified buyers who had previously locked in lower interest rates, rushed to close on homes before their pre-approvals ran out. This drove sales in June, through July, and continues to be the situation for the majority of buyers currently looking for homes. 

The last couple of weeks have been more encouraging as we have noticed increased buyer activity and more offers rolling in. It seems buyers now feel a bit more comfortable knowing that they have more choice and more negotiating power.

The condo market showed similar signs of a slowdown albeit less severe with prices dropping 10% compared to June yet still up 2.5% over last year. Inventory rose by 7% in July vs June and the number of sales dropped by 25% in July compared to the previous month this year. 

There is talk of another interest rate hike this quarter or next and inventory continues to climb. The laws of supply and demand dictate the market and currently, supply is beginning to outpace demand. Look for the fall market to soften further as older interest rate pre-approvals expire and the reality of 6-7% mortgages begins to sink in.