Buyer confidence in Quebec housing market builds in Q4 2024, despite domestic and global political turbulence
Quebec real estate market’s year-end recovery sets the stage for a robust, early spring
Highlights:
- Property prices in the province ended 2024 8.6% above Q4 2023.
- Quebec City posted the strongest year-over-year increase in aggregate property prices in the province in Q4, followed by Trois-Rivières and Sherbrooke.
- Gains in activity are the result of renewed consumer confidence, following five consecutive rate cuts by the Bank of Canada in 2024.
- Encouraged first-time buyers returned to the market in the condominium and entry-level property segments, while a first wave of “non-essential” move-up buyers and investors also tried to seize
- While Canadian and global political tensions challenge the predictability of the country’s economic outlook, Quebec’s real estate market has proven resilient.
MONTREAL, Quebec, January 14, 2025 – According to the results of the Royal LePage® House Price Survey and Market Survey Forecast released today, Quebec’s real estate market ended the fourth quarter of 2024 on a high note, with renewed activity and prices continuing to rise in all of the province’s major markets, when compared to the previous year. The main driver of price growth was the sustained drop in interest rates, including two cuts of 50 basis points each in October and December by the Bank of Canada, which stimulated sales activity in two main segments: entry-level and move-up purchases.
The aggregate[1] price of a property in the province ended the fourth quarter of 2024 with an increase of 8.6% over the same period in 2023 to $560,500, representing an increase of 1.3% on a quarterly basis. When broken out by housing type, the median price of a single-family detached home in the province rose 10.6% year over year to $625,500. For condominiums, the median price recorded a more moderate increase, rising 6.3% year over year to $446,200. Price data, which includes both resale properties and new construction, is provided by RPS Real Property Solutions, a leading Canadian real estate valuation company. Provincial median prices are calculated using a weighted average of median values collected in the reported regions.
“Fourth-quarter results are primarily due to last October’s 50-basis-point cut to the Bank of Canada’s key lending rate,” said Dominic St-Pierre, executive vice-president of business development, Royal LePage. “This gave buyers who had hit pause a clear signal to move forward with their purchase plans, or at least the confidence to get back on track. Activity quickly picked up in November. Then, a second 50-basis-point cut in the policy rate was announced in December as an additional ‘gift under the tree’, releasing another wave of demand in several markets across the province.”
Quebec market demonstrates resilience
Despite an encouraging uptick in activity, a number of political and economic uncertainties hang over the Quebec and Canadian real estate markets. Among them, a weakening Canadian dollar and the threat of a trade conflict between Canada and the United States, including the possibility of 25% tariffs on exports which remains a source of concern.
“A trade conflict fueled by a material tariff increase, in particular, would risk boosting inflation and affecting jobs in certain key industries in Quebec and across the country. In any case, these repeated threats could be enough to challenge our government, whose position is already weakened, and hurt consumer confidence. We don’t anticipate any direct consequences on the real estate market, but historically, consumers tend to put important decisions on hold when the future is uncertain,” said St-Pierre.
St-Pierre noted that the prorogation of Canada’s federal government until March 24th adds to economic instability. A federal election is inevitable and its outcome could bring a wave of positive change, even if it comes at a time when the country requires stability in the face of adversity. Regardless of the outcome, housing access and affordability will undoubtedly be among the most pressing issues for voters.
“The housing crisis, which remains present across the country and the province, will definitely be an issue at the ballot box for Quebec voters,” says St-Pierre. “Although Trudeau’s liberal government has launched a number of initiatives to promote access to home ownership, mainly for first-time buyers, the pressure on property prices stimulated by population growth and the lack of available housing remains unresolved. Political parties will need to show innovation and vision in their proposals to help consumers, municipalities and provinces deal with the challenges of affordability and housing supply.”
Positive factors to watch for
Despite current economic and geopolitical tensions, there are a number of positive factors to look out for, which should bolster the province’s and the country’s real estate market performance in the months ahead.
In 2024, new mortgage rules were implemented to alleviate some of the barriers to home ownership, including extending the amortization period to 30 years for all new construction purchases and all first-time buyers, as well as a relaxation of the mortgage stress test rules for those considering switching lenders upon renewal.[2] These changes, while designed to offer more flexibility to buyers, could also put upward pressure on property prices in certain market segments.
The increase to the insured mortgage cap from $1 million to $1.5 million last December is an example of a measure that should benefit the Toronto and Vancouver markets in particular, where property prices are significantly higher. In Quebec, where prices are generally more affordable, this initiative is not expected to have a significant impact.
“These adjustments, while intended to improve affordability, could also intensify competition in the market, which will likely fuel higher prices in some areas,” says St-Pierre. “For Quebec, the impact of the increase to the insured mortgage cap will be limited, given that property prices remain more modest compared to those in other major urban centres, such as Toronto and Vancouver.”
While immigration has traditionally fueled housing demand, an expected reduction in immigration thresholds this year across the country[3] and in the province[4] could ease pressure on housing.
The continuing decline in interest rates will be another key factor supporting housing market activity in the months ahead. After two years of higher interest rates, the downward trend initiated by the Bank of Canada in June 2024 will, in all likelihood, continue into 2025, offering consumers greater purchasing power and renewed confidence in the economy.
Another positive development for the real estate market is the return of residential investors, who had retreated from the market due to lower or negative profitability projections caused by rising interest rates. In addition, uncertainty surrounding the application of the increased capital gains tax inclusion rate persists for Canadians as the next tax return deadline approaches. Despite this legislation not yet being passed, the Canada Revenue Agency (CRA) will continue to apply the tax changes until the government signals a different intention, as is convention.
“Investors, attracted by the possibility of generating passive income through rental properties, among other things, are once again becoming active in the market,” says St-Pierre. “This comeback, particularly in the plex market, demonstrates a recovery in a segment that had been disrupted due to interest rate increases, which drastically reduced the break-even point for investors. Furthermore, with the capital gains tax measure recently introduced by the Canadian government not having been passed before the prorogation of parliament, investors previously discouraged by these tax rules could be encouraged back to the market,” he argues.
St-Pierre adds that real estate activity in the fourth quarter of 2024 was driven by the return of two other buyer segments.
“Real estate activity last quarter was boosted by the return of buyers previously pushed out of the market, as well as by move-up buyers – often described as ‘non-essential’ buyers – still looking for opportunities to improve their living conditions, due to more favourable interest rates. This trend has resulted in increased competition in the entry-level segment, but also, in demand for move-up properties, which had remained virtually flat throughout the better part of 2024.”
Despite the economic and political uncertainty that hangs over the coming year, the Quebec real estate market seems well-positioned to maintain its momentum, remaining in the single-digit price appreciation range in most regions. Limited supply and more favourable mortgage conditions will continue to support these increases, although housing starts are projected to rise in the province in 2025.[5]
“Even with geopolitical and economic uncertainties, we expect strong competition throughout the first half of the year with transactions peaking towards the end of the first quarter of 2025. The next Bank of Canada announcements, scheduled for late January and mid-March, will play an important role in determining what comes next,” concludes St-Pierre.
Last December, Royal LePage published its 2025 Market Survey Forecast, predicting that the aggregate price of a property in the province of Quebec would increase 7.0% year over year to $599,735. This forecast takes into account rising inventory, although it remains below the historical average, and the return of several buyer segments to the real estate market, resulting in strong competition.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
REGIONAL SUMMARIES
Greater Montreal Area
The return of first-time buyers and move-up buyer demand drive activity
In the Greater Montreal Area, the aggregate price of a home ended the year 8.2% higher than in the fourth quarter of 2023, at $613,300, up 1.3% on a quarterly basis. The median price of a single-family detached home rose 10.6% year over year to $696,300 in the fourth quarter of 2024, while that of a condominium increased 6.1% over the same period to $477,500.
This growth reflects strong activity, particularly in December, when sales surpassed November’s record levels.
“We saw a very dynamic end to the year in the Montreal real estate market. Consumers are feeling more confident about the future, aided by a steady decline in interest rates,” confirms Marc Lefrançois, chartered real estate broker, Royal LePage Tendance. “With improved purchasing power, first-time buyers have begun to come off the sidelines to enter the real estate market before competition increases and puts upward pressure on prices. We’re also seeing significant demand from empty-nester households in search of a smaller space. As a result, the condominium and entry-level single-family home markets were very busy in the last quarter,” he points out.
Thawing of the move-up property segment in the middle of winter
In Montreal, the appeal of move-up properties picked up after months of stagnation. Following initial signs of recovery during the summer months, activity in this segment accelerated towards the end of the year, despite this traditionally quieter period. The luxury market also regained momentum, marked by a notable increase in inventory.
“By analyzing home prices below and above the million-dollar mark and taking into account inflation over the past eight years, we note that the gap has narrowed in several neighbourhoods on the island, creating interesting opportunities for buyers looking to upgrade. This trend was particularly noticeable when comparing the island of Montreal to its suburbs. Montreal is once again becoming the location of choice for families considering upgrading their property type and moving back to the city,” adds Lefrançois.
“This thaw in the mid- to high-end market, which coincides with the cold season, is stimulated by renewed consumer confidence in the economy. Although this segment of the market is less vulnerable to interest rate fluctuations, this clientele is closely monitoring the general state of the economy and stock markets to keep track of their overall financial portfolios,” points out Lefrançois. “The increase last quarter in listings at higher price points clearly boosts potential sellers’ optimism about their future profitability when they decide to put their properties on the market,” he continued.
Royal LePage forecasts that the aggregate price of a property in the Greater Montreal Area will increase 6.5% in the fourth quarter of 2025, compared to the same quarter last year, to reach $653,165.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
Quebec City
Aggregate property price surpasses the $400,000 mark in the region
In the Quebec City region, the aggregate price of a home ended the year 11.3% higher than in the fourth quarter of 2023, at $400,600, up 3.1% on a quarterly basis. The median price of a single-family detached home rose 13.2% year over year to $428,300 in the fourth quarter of 2024, while that of a condominium increased 9.7% over the same period to $293,400.
The Quebec City real estate market ended 2024 with marked price growth, fueled by a persistent imbalance between supply and demand.
“Residential real estate activity continued through the end of the year, as many properties that had been languishing finally sold in the fourth quarter. This led to further increases in property prices,” points out Michèle Fournier, vice-president and real estate broker, Royal LePage Inter-Québec. “Despite indicators of increased activity compared to the fourth quarter of 2023, a decline in sales was recorded between the third and fourth quarters of 2024, due to a decline in inventory. In other words, the only drag on sales remains the lack of available properties on the Quebec City real estate market.”
The number of active buyers in the market still far exceeds the number of properties listed for sale, leading to multiple-offer scenarios whenever an affordable, well-maintained property is listed. Significant discrepancies between asking and selling prices have thus re-surfaced.
Fournier adds that buyers have adapted to the scarcity of housing supply by compromising on certain criteria, most notably by waiving the inspection and improving their offers to remain competitive.
“It’s unfortunate that some buyers are dropping the inspection from a purchase offer to increase their chances of winning a bid,” comments Fournier. “This is a direct result of the chronic imbalance between the creation of new housing and the continued growth of the population in need of housing.”
Economic factors and the impact of lower interest rates
The recent decline in interest rates has given buyers greater purchasing power, partly offsetting the effect of rising prices. However, Michèle Fournier advises first-time buyers to remain cautious.
“Even if you now qualify for a more expensive property, it’s essential to stick to your initial budget,” she advises. “The ever-increasing cost of living is likely to catch up with you. It’s better to enter the market through a less expensive home that will likely earn you equity over time to help you transfer to a more suitable property in the years to come.”
On the developer side, lower rates could improve project profitability, easing the drag caused by labour shortages and high construction costs. This dynamic could encourage some developers to launch new projects in and around Quebec City.
Royal LePage forecasts that the aggregate price of a property in the Quebec City region will increase 11.0% in the fourth quarter of 2025, compared to the same quarter last year, to reach $444,666.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
Gatineau
Seller’s market persists as demand outstrips supply
In the Gatineau region, the aggregate price of a home ended the year 5.8% higher than in the fourth quarter of 2023, at $444,900, reflecting a quarterly decline of 1.4%. The median price of a single-family detached home rose 6.7% year over year to $538,900 in the fourth quarter of 2024, while that of a condominium rose a modest 2.5% over the same period to $325,100.
“In the fourth quarter of 2024, Gatineau’s residential real estate market posted healthy price increases over the same period last year, but recorded small quarterly declines across all property types,” notes Karine Séguin, chartered real estate broker, Royal LePage Vallée de l’Outaouais. “This is because the region has seen a significant rise in home prices over the past five years, and buyers, better informed than before about market value, are standing firm and bringing some balance back to the market,” she adds. “Despite this, the advantage remains in favour of sellers, given that demand outstrips supply in the region.”
Unlike most of the province’s major real estate markets, the Gatineau market recorded quarterly declines in sales between October and December, compared to the previous quarter, which Séguin notes is due to an increase in listings and the fact that buyers are negotiating more, increasing the time it takes to close a deal.
Market activity unlikely to be hampered by pending federal election
Historically, federal elections have had the effect of slowing down the Ottawa-Gatineau real estate market, given the composition of the region’s job market, which is predominantly composed of public servants. With an upcoming election in Ottawa this year, Séguin believes a significant slowdown in transactions is unlikely.
“Mortgage conditions, which have been steadily improving since the first reduction in the Bank of Canada’s key lending rate last June, play a major role in the resilience of the Gatineau real estate market,” explains Séguin. “Even though we usually experience a period of stagnant activity when the political environment becomes uncertain, I expect most buyers to continue with their purchase plans, mainly in the entry-level segment. What’s more, the programs introduced by the current government to improve access to home ownership could prompt some buyers to accelerate their transactions in order to capitalize on these initiatives. So it’s not out of the question that we could see an acceleration in transactions in the first quarter of the year,” she concluded.
Royal LePage forecasts that the aggregate price of a property in the Gatineau region will increase 6.0% in the fourth quarter of 2025, compared to the same quarter last year, to reach $471,594.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
Sherbrooke
Tighter competition in entry-level segment; increased days on market in luxury segment
In Sherbrooke, the aggregate price of a home ended the year 10.4% above the fourth quarter of 2023 at $374,300, declining slightly by 0.5% on a quarterly basis. The median price of a single-family detached home rose 10.8% year over year to $410,800 in the fourth quarter of 2024.
“Consumer confidence, bolstered by lower mortgage rates and the extension of the amortization period to 30 years for first-time buyers, contributed to a very active market in Sherbrooke during the last quarter of the year,” explains Jean-François Bérubé, chartered real estate broker, Royal LePage Évolution EB. “First-time buyers therefore benefit from greater purchasing capacity, which in turn pushes up prices. It’s a vicious circle where measures to improve affordability create demand and mitigate the gains of these first-time buyers.”
Sherbrooke remains one of the most affordable regions in the province[6] and continues to attract significant inter-provincial migration, thanks to its proximity to other major Quebec cities. Government home ownership assistance programs, combined with one of the lowest unemployment rates in the province[7] and a low vacancy rate in the rental sector, are driving tight real estate market conditions.
Properties listed at prices higher than actual market value have been harder to sell in recent months, and days on market for high-end homes have increased. However, this trend has not dampened activity in the entry-level segment, where multiple offers and auctions have remained common.
Outlook for 2025
With a federal election just around the corner, the issue of housing affordability is set to take centre stage in political debates. The various parties will be expected to propose strategies to meet current market challenges, particularly for first-time buyers who continue to face increasing price pressures.
“Against a backdrop of increasingly attractive mortgage rates and a limited supply of available properties, I expect buyers to remain active in the Sherbrooke real estate market, despite the upcoming federal election,” says Bérubé. “That said, housing affordability will inevitably be a major issue in this election, and we expect all parties will try to win over the electorate with housing strategies. In the meantime, further cuts to the Bank of Canada’s key lending rate are expected, which should continue to fuel real estate demand,” he continued.
Royal LePage forecasts that the aggregate price of a property in the Sherbrooke region will increase 7.0% in the fourth quarter of 2025, compared to the same quarter last year, to reach $400,501.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
Trois-Rivières
Buyers rush to the market, anticipating strong competition and rising prices
In the Trois-Rivières region, the aggregate price of a home ended the year 10.7% higher than in the fourth quarter of 2023, at $362,900, up 2.6% on a quarterly basis. The median price of a single-family detached home rose 9.9% year over year to $390,500 in the fourth quarter of 2024.
“The Trois-Rivières market continues to surprise me, in a positive way, despite fluctuating days on market,” said Martin Leblanc, chartered real estate broker, Royal LePage Centre. “An increase in sales compared to last year and gradual increases in inventory levels show that buyer demand remains strong in the region. Competition remains high, and we continue to see a significant proportion of sales with multiple offers and closing above asking. With the gradual decline of interest rates, buyers anticipate that prices are likely to rise again quickly, and figure it’s better to buy now before the competition heats up.”
On the rental side, the dynamics are also changing. Vacancy rates remain extremely low, and rents, previously producing negative cash flow, are now becoming a source of profit for landlords once again. This has led many investors to return to this sector, increasing interest in multiplex projects.
”We’re seeing a real rebound in the rental sector. Investors can now foresee a more attractive return on investment, which explains the renewed activity in the plex segment,” adds Leblanc.
The forecast for 2025 remains positive for the Trois-Rivières real estate market, with an expected increase in housing starts and sustained buyer demand. According to Leblanc, the Bank of Canada’s downward adjustment of the key lending rate, which is expected to continue this year, is also improving buyers’ access to credit, with more and more of them turning to three-year fixed-rate mortgages.
Royal LePage forecasts that the aggregate price of a property in the Trois-Rivières region will increase 4.0% in the fourth quarter of 2025, compared to the same quarter last year, to reach $377,416.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2024-QC
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2024-QC
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About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the most common types of housing, nationally and in 64 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from partner company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Provincial median prices are calculated using a weighted average of median values collected in the reported regions. Additionally, commentary on housing market trends and data on price and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
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Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of approximately 20,000 real estate professionals in over 670 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage® Shelter Foundation™, which has been dedicated to supporting women’s shelters and domestic violence prevention programs for 25 years. Royal LePage is a Bridgemarq Real Estate Services® company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.
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Hill & Knowlton for Royal LePage
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[1] Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions and includes both resale and new build.
[2] Federal government announces landmark adjustments to mortgage rules for first-time buyers in Canada, September 17, 2024
[3] Government of Canada reduces immigration, October 24, 2024
[4] Plan d’immigration 2025 – Québec annonce un moratoire sur deux programmes d’immigration permanente, October 31, 2024
[5] APCHQ, Prévisions 2024-2025 du secteur de la construction et de la rénovation résidentielles au Québec, January 18, 2024
[6] 4 Quebec cities make the list of Canada’s most affordable housing markets; Montrealers ready to move, June 6, 2024
[7] Statistics Canada. Table 14-10-0378-01 Labour force characteristics, three-month moving average, unadjusted for seasonality