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Spotlight on Housing

Quebec’s Resale Market Has Stabilized, but New Home Construction Has Continued to Slide

June 6, 2023
Hélène Bégin, Principal Economist • Maëlle Boulais-Préseault, Economist

The effects of the steep interest rate hikes that began in Q1 2022, throwing a wrench into the residential housing market, seem to be easing, at least for now. After a period of declining resale prices, things have levelled off somewhat in recent months. Still, it’s probably just a pause. We’re in for a more challenging economic environment in the coming quarters, with a short, moderate recession still forecast for Quebec in 2023, which will soften the labour market and, in turn, the housing market. The current reprieve for the resale market is therefore likely to be short-lived.

The new home construction market, on the other hand, has continued to slide: the high cost of land, materials and labour is compounding the growing financing challenges faced by many developers. The creation of new rental housing is slowing, putting increased pressure on rent prices.