Aerial view of Montreal city skyline, Olympic Stadium

The Quebec real estate market experienced dramatic house price increases over the past two years, due to several factors.

First, real estate demand was strong before we’d even heard of COVID-19. The pandemic exacerbated an existing problem: the chronic lack of housing supply. We have witnessed tight competition between buyers, particularly on the outskirts of the province’s major urban centres, where potential homeowners dreamed of owning a larger property to better cope with the ebbs and flows of pandemic-related restrictions. With mortgage costs at all-time lows, the lowest unemployment rate of any Canadian province in December, and household savings growing due to restricted travel, a perfect storm emerged that continued to stimulate housing demand and put upward pressure on home prices.

While property prices increased the most during the first half of 2021 in the majority of Quebec’s real estate markets, price appreciation in the fourth quarter of 2021 compared to the same quarter in 2020 was very strong, setting all-time records for the fourth quarter in the Greater Montreal Area, Quebec City, Gatineau, Sherbrooke and Trois-Rivières.

“The real estate market behaved as expected, with strong price growth in the first half of the year, followed by easing price gains towards the end of 2021,” said Dominic St-Pierre, vice-president and general manager of Royal LePage for the Quebec region. “Real estate demand slowed slightly, as vaccination rates ramped up and health restrictions decreased during the second part of the year. However, the rate of price appreciation in the Greater Montreal Area during the fourth quarter of 2021, compared to the same period in 2020, proved to be robust. While we reported a significant increase in the year-over-year aggregate price, the strongest price growth occurred in the first six months of 2021,” he added.

Dynamic market expected in 2022

In 2022, Royal LePage expects prices to continue to rise, driven by a lack of inventory, growing demand and low interest rates. To that end, the anticipation of the first Bank of Canada prime interest rate hike since October, 2018, could accelerate demand.

“Historically, when an interest rate hike is on the horizon, buyers try to ‘beat the rush’. If the Bank of Canada maintains its intention to raise its overnight lending rate, we anticipate that consumers, and especially first-time buyers, will try to transact quickly at the beginning of the year,” explains Mr. St-Pierre.

Furthermore, the Omicron variant will ensure that homeownership is once again a top priority for consumers in 2022, as it has been during previous waves of the pandemic. 

Key highlights – Province of Quebec:

  • Greater Montreal Area: The aggregate price of a home increased 19.7% year-over-year to $532,600 in the fourth quarter of 2021. Read the regional release 
  • Quebec: The aggregate price of a home increased 10.0% year-over-year to $326,500 in the fourth quarter of. Read the regional release (FRENCH ONLY) 
  • Gatineau: The aggregate price of a home increased 22.9% year-over-year to $379,300 in the fourth quarter of 2021. Read the regional release (FRENCH ONLY)
  • Sherbrooke: The aggregate price of a home increased 20.8% year-over-year to $294,300 in the fourth quarter of 2021. Read the regional release (FRENCH ONLY)
  • Trois-Rivières: The aggregate price of a home increased 17.9% year-over-year to $261,200 in the fourth quarter of 2021. Read the regional release (FRENCH ONLY)

To learn more about the Royal LePage House Price Survey, check out the national blog post.