Since the pandemic, the very definition of luxury real estate has evolved, as housing supply shortages have transcended all market segments and driven up prices. While the luxury property category is more resilient and less prone to fluctuations compared to the general residential market, its clientele remain attentive to the country’s overall economic health, which they use as a sounding board to make informed decisions about building their real estate wealth.
Though lower interest rates have helped revive buyer confidence these past few months, what lies ahead for the prestige property markets of Montreal and Quebec City as we enter the final quarter of 2024 and look ahead to 2025?
According to the 2024 Royal LePage® Carriage Trade® Report, sales of luxury properties rose in the province of Quebec, although prices fell in the province’s two largest cities. In the first eight months of 2024, the median price of a luxury property in the city of Montreal decreased 2.8% year over year to $3,150,000. During the same period, sales activity increased 8.3%. The entry-level price of a luxury property in Montreal is $2,500,000.
“Sales activity in Montreal’s luxury property market has experienced an upturn in the past year, despite both buyers and sellers taking a wait-and-see approach to the economy and housing market. As interest rates decline steadily, high-end purchasers feel more reassured about making important financial decisions, such as buying a home,” said Marie-Yvonne Paint, certified residential and commercial real estate broker, Royal LePage Heritage.
“In light of rising construction material costs and skilled-labour shortages, buyers are seeking turn-key properties with limited renovations required, and are waiting for the right product to be listed. Sellers, on the other hand, are equally patient, holding firm on their asking price, resulting in higher luxury housing inventory compared to pandemic levels.”
Properties that have sold over the minimum luxury price threshold in Montreal this year have an average of 3.7 bedrooms and 3.1 bathrooms.
In Quebec City, the median price of a luxury property in Quebec City decreased 7.2% year over year to $1,200,000, in the first eight months of 2024. During the same period, sales activity increased 30.4%. The entry-level price of a luxury property in Quebec City is $1,000,000.
“In Quebec City, the luxury property segment has followed a different trajectory from the mainstream residential real estate market this year, observing downward pressure on prices and an increase in the number of transactions compared to 2023,” said Louis Belzile, residential and commercial real estate broker at Royal LePage Blanc & Noir. “While the mainstream market continues to see multiple offers and overbidding, Quebec City’s luxury segment is experiencing buyer-friendly conditions with increased inventory and reduced prices, giving purchasers an advantage. The exception is sought-after turn-key properties, whose listing prices are well in line with actual market value, and tend to receive competitive offers.”
Properties that have sold over the minimum luxury price threshold in Quebec City this year have an average of 3.5 bedrooms and 2.4 bathrooms.
Among Montreal’s luxury neighbourhoods, Paint also noted that a number of sellers are listing their homes to test the market’s waters and gauge buyer interest, which inflates inventory levels and extends the average days on market in the high-end property category.
“Given that the luxury property segment remains rather small compared to the overall real estate market, the number of comparable homes is equally low and can make setting the right listing price a challenge for sellers,” she explained. “Relying on the niche expertise and knowledge of a real estate professional will allow the property to have a successful sale, with limited days on market and with the most favourable outcome for both parties.”
Belzile added that young professionals and families looking for a more spacious residence are a growing clientele in Quebec City for luxury properties in the market’s entry-level price segment. Though luxury homebuyers are less sensitive to interest rate fluctuations, it is rare for buyers to make a million-dollar home purchase without financing, according to Belzile.
“Luxury buyers in Quebec City are looking for homes that go beyond square footage. They’re seeking properties with soul, unique character and tasteful renovations. In today’s market, high-quality, custom-built and turn-key homes are selling at lightning speed,” emphasizes Belzile. “While traditional neighbourhoods like Sillery and Sainte-Foy remain popular, emerging locations like Lac-Beauport are increasingly coveted for their proximity to nature. They are a major attraction for those seeking a more serene lifestyle within a reasonable distance of downtown.”
Paint expects Montreal’s luxury market to post steady growth during the fall and into the spring market, with stabilizing inflation and falling interest rates fueling overall optimism among buyers.
Belzile anticipates that luxury buyer demand will continue into the fall and be sustained for most of 2025, spurred by the continued easing of interest rates, which should drive prices up moderately in the months ahead.
Source: Royal Lepage
Director, Communications & Marketing, Quebec
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