Investor confidence in Quebec reaches five-year low

Confidence among property investors in Quebec has reached a five-year low, according to a report.

The Conference Board of Canada’s Consumer Confidence Index found that the proportion of Quebecois who feel that it is a good time to make a major purchase, such as a property, decreased to 34.6 per cent.

This was the first time that this proportion dipped below 40 per cent since April 2009, when Quebec’s economy was in a recession.

Paul Cardinal, manager, market analysis at Quebec Federation of Real Estate Boards (QFREB), was surprised by these results. “It decreased everywhere in Canada but it was a little more pronounced in Quebec,” he said.

“I cannot find exactly the reason it was so bad. It’s probably due to our employment situation. We had very bad numbers for employment at the beginning of the year. It’s a bit better, but there is a question in the Index ­– ‘Do you think you’ll be financially better off six months from now?’ - and it was a poor number for October in Quebec.”

These findings are out of line with other recent statistics published by the QFREB, which showed that residential sales for the province’s six Census Metropolitan Areas all registered growth in the third quarter of 2014, for the first time since the first quarter of 2012.

The largest increases in sales were in the Trois-Rivieres and Saguenay areas, at 16 per cent and 15 per cent, respectively.  Sales increased by 8 per cent in Sherbrooke, by 5 per cent in the Quebec City, by 2 per cent in Gatineau and by 1 per cent in Montreal.

Quebec, in fact, figures prominently in this year’s Top 100 Neighbourhoods to Invest, the annual list of this country’s top micro markets by Canadian Real Estate Wealth magazine.

The province’s strong showing reflects the strength of the rental market in and around suburban Montreal, as well as the relatively low-price points associated with small multifamily and condo properties.

Terry Kilakos, president of Montreal-based North East Mortgages, says that 2014 began with a strong real estate season for the province, but all that changed when an election was called in early March and the threat of a referendum loomed.

“It’s a cycle that comes all the time,” says Kilakos. “People love Quebec, they will continue to purchase here, but whenever there is the loom of referendums, consumer confidence really drops for any major ticket item because they don’t know if they’re going to be here or if they’re going to be gone.”

Cardinal adds: “For the Consumer Confidence Index, it can be very volatile. Maybe it will last only one month and get better next month. What we’re seeing in the real estate market is not reflective of people who are afraid to buy, it’s the opposite; the activity is increasing right now.”

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