Montreal’s housing market recovery has hit a wall this year, weighed down by trade tensions.
Even with recent signs of easing in tariffs, the real estate market remains sluggish, according to RBC.
Home resales fell an estimated two per cent from May to June — the third monthly decline in a row.
Still, resales are holding up at what would have been considered solid levels before the pandemic.
“June’s modest pullback may have more to do with fewer sellers entering the market than buyers shying away,” said Robert Hogue, RBC assistant chief economist, in his monthly market report.
New listings fell by roughly seven per cent from May, according to RBC data, tightening an already constrained market.
That imbalance has continued to fuel price growth. Median prices rose year-over-year in June, up 7.4 per cent for single-family homes and 6.6 per cent for condominiums.
“We think prospective sellers aren’t likely to stay away long, especially if trade worries ease. More homes for sale would help rebalance the market and dampen price increases,” said Hogue.
Cautious return of buyers to housing markets across Canada
Elsewhere in Canada, more prospective homebuyers are slowly making their way back into the market.
Local real estate board data shows slight increases in transactions between May and June across major cities such as Vancouver, Edmonton, Regina, Saskatoon, Toronto and Halifax. However, the gains reverse only a small portion of earlier declines.
“Activity is still soft in Southern Ontario and British Columbia, even though it’s stabilized,” Hogue said. “The picture is generally more robust in other parts of the country, with some exceptions.”
Price trends remain largely unchanged. The MLS Home Price Index continues to edge lower in Toronto, Vancouver and other parts of Southern Ontario and the Lower Mainland, where inventories are elevated and affordability remains a hurdle.
Meanwhile, prices are still climbing in much of the Prairies, Quebec and Atlantic Canada, supported by tight supply-demand conditions.
“While any positive development in the trade war would boost confidence and keep the housing market on a recovery course, we think the impact would most likely be gradual, especially in regions struggling with affordability,” said Hogue. “We expect diverging price trends to persist in the near term across the country.”
