Real Estate Market

Quebec says 3 times more homes could be in flood zones under new mapping

 Some 55,000 more homes in Quebec will be in areas at risk of flooding — three times more than today — according to a new generation of flood maps coming from the provincial government.

Quebec officials released the estimates and announced the establishment of a new regulatory framework related to flood zones at a news conference Tuesday. Those new regulations will also apply to structures meant to mitigate flood risks like dikes and barriers, which are referred to in French as Ouvrages de protection contre les inondations (OPI). 

Although the new maps have yet to be produced, officials expect that nearly 77,000 homes, or two per cent of Quebec's population, could find themselves in a flood zone compared to 22,000 today.

"In certain places in Quebec, the flood zone mapping has not been updated in 30 years," Environment Minister Benoit Charette said Tuesday. "We have to update our way of doing things based on the science, and that is what we are proposing today."

Quebec isn't tracking the state of its flood protection structures. Experts see risks growing

The maps will be produced in collaboration with municipalities in the coming months and the new flood-management plan as a whole will be the subject of public consultations with residents and municipalities this summer. The plan is expected to be implemented by 2025.

Currently, Quebec's flood maps are based solely on the recurrence of floods and are divided into high-risk and low-risk areas — where there is a five per cent and one per cent chance of a flood in any given year, respectively.

What are flood maps, and why are they important?

The new maps will designate areas of "flood intensity" by taking into account the frequency of floods, the water depth reached as well as the impacts of climate change.

The flood zones will now be classified by four levels, ranging from "very high" for regions with more than a 70 per cent risk of flooding over 25 years and over 60 cm of water expected, to "weak" in areas with a seven to 20 per cent risk of flooding over 25 years and less than 30 cm of water expected.

In a statement released Monday afternoon, the Communauté métropolitaine de Montréal (CMM) — which represents 82 municipalities in the greater Montreal area — welcomed the province's plan to revamp regulations related to flood management.

However, the CMM said it is worried about the effects the new framework will have on properties located behind OPIs, especially as it affects their value.

New limitations on construction

New regulations announced Tuesday stipulate that repair and renovation work can generally proceed in flood-prone areas, but rebuilding severely damaged structures in very high-intensity flood zones may be restricted.

Expansion in very high-intensity areas will also be limited to essential needs only. Additionally, construction of new buildings in flood-prone areas, even in low-intensity sectors, will not be permitted.

However, municipalities can mitigate risks by implementing flood protection structures such as dikes, which can lead to a reclassification to a lower-intensity zone.

The flood-management plan provides for stricter guidelines for municipalities to follow in order to prevent flooding, such as maintaining and monitoring flood prevention infrastructure. 

Officials say the objective of the framework is not to relocate residents at risk, but to increase their security and protect their property as well as the environment.

Concerns regarding insurance rates

Asked about what the new flood zone maps will mean for insurance rates for affected residents, Charette said they may not have a direct impact as insurance companies generally use their own mapping criteria to assess flood risk.

In March, Desjardins Group, a major financial institution based in Quebec, announced it will no longer offer new mortgages in high-risk flood zones across the province. It also doesn't provide flood insurance in those areas.

The announcement sent shock waves through low-lying communities, from Charlevoix, north of Quebec City, to the suburban areas of Montreal.

A Quebec lender opted out of mortgages in flood zones. Experts warn it could happen elsewhere

Traditionally, it has fallen on the Quebec government to step in to help homeowners cope with the costs of flooding. 

But after 2019, when flooding forced the evacuation of more than 6,000 residents of Sainte-Marthe-sur-le-Lac, Que., and damaged hundreds of homes, the government signalled its unwillingness to pay for repeated flood damage at the same address, imposing a new lifetime cap on compensation per home and financial incentives for people to relocate from homes in high-risk zones.

Montreal and Quebec City see rising residential sales and prices in May: QPAREB

The Quebec Professional Association of Real Estate Brokers (QPAREB) reports 4,563 May residential home sales in Montreal, a four per cent increase compared to the same period last year and slightly more than the historical average for this time of year.

As for Quebec City, there were 877 residential sales last month, two per cent more than the same time last year and the third-highest transaction level for the time of year since 2000.

Montreal highlights
“Although sales for the month of May rose only by four per cent compared to May 2023, we should keep in mind that it is in comparison to the strong market at this time last year. Activity therefore remained particularly solid. Specifically, the North Shore of Montreal held the lead, not only by posting one in every four transactions in the Montreal region, but also by a 13 per cent jump in sales,” notes Charles Brant, QPAREB market analysis director.

The Montreal area saw 2,334 sales of single-family homes, a two per cent jump compared to the same time last year. Condominium sales were up five per cent at 1,786 transactions, while small-income properties saw 440 sales, an 11 per cent increase. Active listings were up 22 per cent from a year ago to reach 18,996 listings.

Prices went up overall from a year ago and remain stable compared to April, across property types. Compared to a year ago, condominiums were at $410,000, two per cent higher, single-family homes were at $575,500, five per cent up and plexes were at $780,000, an increase of seven per cent.

Quebec City highlights
“The month of May saw particularly high levels of transactional activity in Quebec City. As regional market strength was already well established in May 2023, the resulting low variation in sales compared to last year can be misleading. Single-family home activity was particularly strong in the peripheral markets, while the agglomeration of Quebec City saw considerable interest in plexes. We noted a spectacular jump in the median price for this property category, which, like other property categories, has reached record highs since the beginning of spring,” notes Brant.

Quebec City had 629 sales of single-family homes last month, which was 18 per cent higher than the same time last year. Condominium sales were up 13 per cent at 272 transactions, while small-income properties saw 75 sales, an increase of 34 per cent. Active listings went down from a year ago by nine per cent to 2,673 listings, because of fewer condominium and plex listings.

Prices went up overall both from a year ago and from April, across property types. Condominiums were up 19 per cent to $276,500, single-family homes were at $381,340, nine per cent up and plexes were at $425,000, an increase of four per cent.


Bank of Canada cuts key rate for first time in more than 4 years

The Bank of Canada has cut its overnight rate by 25 basis points, a move not seen since the beginning of the pandemic.

Wednesday’s announcement puts the policy rate at 4.75 per cent, down from the 5 per cent it has been sitting at since July of last year.

The bank began raising its key interest rate in March of 2022, following larger-than-expected inflation numbers that followed a period of pandemic stimulus and disrupted global supply chains.

The central bank now sees enough evidence that underlying inflation is easing at a sustainable level. The Canadian central bank will be the first to cut rates among its peers at the Bank of England, the European Central Bank and the United States Federal Reserve.

“We’ve come a long way in our fight against inflation,” said Bank of Canada Governor Tiff Macklem, during prepared remarks in Ottawa. “And our confidence that inflation will continue to move closer to the 2 per cent target has increased over recent months.” will stream Macklem's news conference about the rate decrease LIVE at 10:30 a.m. ET.

The inflation rate was at 2.7 per cent in April, down from 2.9 per cent in March of this year. The economy grew by 1.7 per cent in the first quarter of 2024, below what the bank forecasted.

Employment grew by 90,000 in April, driven mainly by part-time employment. While employment has not kept up with the working-age population, it has allowed the number of workers to catch up to job vacancies and wage pressures have started to ease.

However, Macklem warned that risks to the inflation outlook remain and that the decision on further rate cuts will be made one meeting at a time.

“But if we lower our policy interest rate too quickly, we could jeopardize the progress we’ve made,” said Macklem. “Further progress in bringing down inflation is likely uneven and risks remain.”

The next rate announcement is scheduled for July 24.