As we close the first half of 2025, I must admit that I am pleasantly surprised by the market’s performance.
At the beginning of the year, forecasts predicted modest price increases, and mild sales growth, with 2025 looking like it would mirror the previous year. However, according to our latest QPAREB numbers, we’ve seen a 12% increase in sales across Quebec, so far this year. This represents a significant over-achievement against the forecasted 1% increase, for the entire year.
Looking at the province as a whole: We’ve experienced a 9% increase in new listings; yet, the current inventory is down by 3%, putting upward pressure on property prices.
A few key reasons explain this stronger-than-expected market performance:
1. Interest Rates
There’s no denying the impact of interest rates: Low rates have always been a strong driver of real estate sales; and, the Spring market benefited from a downward trend in rates. This trend began in the fall of 2024. While 3 and 5-year fixed rates were the most popular, due to their lower costs compared to variable rates, the broader effect of consecutive rate cuts is undeniable. Since June 2024, we’ve seen a total of 7 rate cuts, reducing the Bank of Canada’s rate by 2.25% (225 basis points), from 5% to 2.75%. While the rate has remained steady in recent announcements, this sequence of cuts has definitely boosted market confidence.
2. Sellers Re-entering the Market
For sales to increase, it’s not just about having more buyers: We also need more sellers willing to list their homes.
In the first half of 2025, we saw a 9% increase in new listings across Québec, with a 12% increase on the Island of Montréal. Sellers, feeling more confident about market conditions, decided it was the right time to participate. This led directly to a surge of new listings coming to market.
3. Confidence in Real Estate
The beginning of 2025 brought political changes in Canada: These coupled neatly with uncertainty from our neighbours to the South. With a fluctuating stock market, many buyers turned to real estate as a safer investment.
Historically: Forecasts predicted a downturn in real estate during the COVID-19 pandemic, but the market defied expectations.
Similarly: When interest rates rose, many predicted a sharp decline in real estate, yet that didn’t materialize either.
This resilience has reinforced real estate as a stable and reliable investment.
4. Government Programs
Government programs have played a significant role in boosting the real estate market for revenue properties: Not only have lower rates made investing in revenue properties more attractive, but programs like the CMHC’s APH Select also allow investors to purchase properties like 8-plexes with as little as 5% down. With such a low monetary commitment required, generating a strong return on investment (ROI) is more accessible than ever. And though there are many criteria to meet in order to qualify for this financing, many buyers are still able to meet these requirements, and to complete their transactions.
As we move into the second half of 2025, the real estate market in Québec remains strong, and there are plenty of opportunities for both buyers, and sellers.
If you have any questions or are considering entering the market, do reach out.