The decrease in activity in 2011 has extended to all market segments but is being especially felt in the case of single-family homes and plexes. In fact, these were the two market segments that most benefited from the effects of the earlier-than-planned purchases in 2009 and 2010. In 2012, the overall rise in transactions will come mainly from the single-family home segment, where the level of activity will move closer to the average for the last few years (about 25,000 transactions).
Condominiums remain the only segment where sales did not drop markedly in 2011. The continued high volume of transactions has been due non only to the rapid growth of the condominium housing stock, resulting from the large number of units of this type started in recent years, but also to the appeal of these dwellings among first-time home buyers, with the condominium market being more affordable than the single-family home market. Condominium sales will continue to rise slightly in 2012.
On the supply side, 2011 has been marked by the rebound in active listings on the resale market. This rise in supply, which began in September 2010, is being fuelled by the slowdown in demand and the increase in new listings. In fact, after having benefited from the growth in prices in recent years, a number of households are testing the market by putting their properties up for sale, as they seek to take advantage of the low mortgage rates to change homes. We anticipate that this growth in supply will continue in 2012. While the resale market had been favouring sellers since the early 2000s, conditions on this market will become more balanced next year. Active listings will reach 24,800 units this year, up by 16.2 per cent over their 2010 level, and then rise by 8.1 per cent in 2012, to 26,800 units. Given the pace of the demand, the main consequence of this change in market conditions will be a gradual easing of the upward pressure on prices. As a result, the growth in the average MLS® price will be slightly lower in 2011 (+5.2 per cent) than in 2010 (+8.3 per cent) but will still remain relatively substantial. This growth will slow down again slightly in 2012 (+2.9 per cent), as potential buyers will see their choices grow on the market. The average price in the Montréal CMA will reach $313,000 in 2011 and $322,000 in 2012.
The condominium segment will stand out once again, by being the first to become a balanced market at the end of 2011. This segment will post the strongest increase in listings and weaker growth in prices this year and next year.
