Real estate dream lives on in Quebec, but prices are taking a toll

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Home ownership remains a goal for many Quebecers — but deteriorating affordability has somewhat dented real estate’s allure.

Twenty-two per cent of Quebecers plan to buy residential real estate in the next five years, down from 25 per cent in 2020, a Léger poll released Thursday found. The proportion rises to 26 per cent in Greater Montreal.

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Seventy-nine per cent of would-be home buyers who answered the survey plan to buy a main residence. Some 67 per cent would prefer to buy an existing property because it costs less than newly built housing, Léger also found.

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“The real estate dream still exists, but Quebecers are going to have to be a lot more realistic,” Léger executive vice-president Christian Bourque said Thursday during a presentation hosted by the Quebec Professional Association of Real Estate Brokers in Montreal.

Soaring real estate prices have affected buyer expectations. Sixty-five per cent of poll respondents who aren’t planning to buy a home say the rise in prices since 2021 has had a negative impact on their intentions, Léger says.

Prospective homeowners across the province now expect to pay almost $440,000 on average for their next property. That’s 35 per cent more than the $325,990 that was expected three years ago, Léger found.

In the Greater Montreal area, the average expected home price now exceeds $501,000, compared with about $375,000 in Quebec City, Léger says.

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Léger polled 4,612 adult Quebec homeowners on the Internet from Oct. 13 to 29. It didn’t state a margin for error for its survey.

Rising borrowing costs are also having a major impact on homeowners. Mortgage payments now eat up an average of 36 per cent of disposable income in Quebec, up from 34 per cent last year, QPAREB data show. This exceeds the peak of 1981, when interest rates were close to 20 per cent.

What’s more, an estimated 60 per cent of mortgages will come due between 2024 and 2027. Mortgage renewals could result in monthly payments 20 per cent to 30 per cent higher than what Quebec homeowners are now dealing with, QPAREB estimates.

Interest rates on a five-year, fixed-rate mortgage in Quebec now average 7.64 per cent, QPAREB says.

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