Saguenay Mortgage Rates.

With COVID-19 making people less likely to list their homes in the short-term in Quebec, the median single family home price in Saguenay rose to $210,000 in the 1st quarter of 2021 from $169,300 in 2020. At the same time, condos in Saguenay fell in price, from $165,000 in 2020 to $157,000 in the 1st quarter of 2021.

As COVID-19 starts to clear up with vaccination rates rising throughout Quebec, it may lead to more single family homes being listed on the market. At the same time, home prices in Saguenay continue to be very affordable and housing demand continues to benefit from more and more people moving further away from Montreal as work from home allows people more flexibility in where they live.

As single family homes continue to be the most desired home option in Quebec and Saguenay, home builders are adjusting to build more of these rather than condos. According to the CMHC, the number of housing starts in Saguenay is 220 year-to-date for 2021, up from 153 for the same period in 2020. The majority of construction in 2020 was condos, while in 2021 the majority of construction is on single family homes, as this type of housing has seen the most demand from buyers. As the supply of single family homes start to reach levels seen before the pandemic, it may make the Saguenay housing market less competitive for home buyers.

As the city of Saguenay continues to see more homes being built to be lived in by homeowners, the rental market in the city has become tighter, with the vacancy rate going from 3.7% in 2019 to 2.8% in 2020. Saguenay has a much lower percentage of its population that rents than other cities in Quebec, with only 35% of the population renting, while 65% own their home. As the vacancy rate has gone down, monthly rental rates in the city have risen, from $611 in 2019 to $632 in 2020. Compared to other cities in Quebec, monthly rental rates and vacancy rates are still around the average:

As long as monthly rental rates and vacancy rates continue to remain at reasonable levels, it should prevent housing prices and housing demand from continuing to rise much more. If the vacancy rate continues to fall and rents start to rise however, there is the potential for more people to look to purchase a home rather than rent, which could raise the demand for housing even more.

All home purchases in the province of Quebec will have a land transfer tax that is different depending on the municipality. The land transfer tax rates in Saguenay, which are paid when you close on a home are calculated using the following marginal tax rates:

If you were to purchase a home at the average price of $210,000, you would incur $1836 in land transfer taxes. When you are determining how large of a mortgage to get pre-approved for, it is important to always consider how much land transfer taxes may be in order to make sure you have enough money to close on the sale.

Located ~200 kilometers north of Quebec City and ~470 kilometers northeast of Montreal, the city of Saguenay sits on the Saguenay River which connects to the St.Lawrence River. The city was formed by merging the cities of Chicoutimi and Jonquiere in 2002. The population of Saguenay in 2020 is 163,354 people, and the city has seen a pick-up in migration both internationally and within the province during the COVID-19 pandemic. Net international migration was 590 people, while 223 more people came to the city from within the province in 2020. Although Saguenay is very far from the Montreal area, it has the potential to continue to benefit from the trend of moving further from the city as people want extra space and more affordable housing.

With the unemployment rate in Saguenay and the Lac-Saint-Jean region being 4.9% in May 2021, the city has more than recovered from an unemployment rate of over 7% in 2020. Saguenay’s economy is very industrialized, with a large presence in the wood, agri-food, and aluminum industries. Within the agri-food industry, Saguenay has many businesses operating in dairy and grain production, food processing, and the growing and processing of blueberries. In the aluminum industry, the city has attracted many large aluminum smelters because of the plentiful hydroelectric power the region offers. Other non-industrial industries in the city include recreation and tourism, which has seen growth over the years from people looking to vacation and do outdoor activities like hunting, fishing, and attending cultural shows. As the city continues to grow its tourism sector and diversify its economy, it has the potential to attract people with differing skill sets, which will only increase the demand for housing in the city.

With Saguenay’s property tax rate being 1.2454% in 2020, homeowners will pay some of the highest property tax rates in all of Quebec. However, with much lower housing values than other major cities in Quebec, your total property taxes owed will likely still be lower than in cities like Montreal or Gatineau. Property taxes are important to consider when you go to get a mortgage; they are a part of your monthly housing expenses, and higher property taxes can eat away at money that could be used to get a larger mortgage amount. Similar to other cities across Quebec, property taxes are usually paid directly to your mortgage lender monthly, who then will use this payment to pay the city.