Sherbrooke's supply turn is reaching condos before houses

The winter story no longer fits every property

During Q1, metropolitan-area sales were 6% above a year earlier and average active listings were 9% lower. That extended a long run of rising sales and shrinking supply. Q2 reversed both directions: sales fell 9% and listings rose 10%. The city of Sherbrooke recorded a smaller sales decline, 7%, than the Magog sector, 11%, or the outer municipalities, 16%. The slowdown was widespread, but its intensity differed by location. [Q1 2026 regional market release] [Q2 2026 provincial and regional market release]

The price comparison is more revealing than the broad seller-market label. Condo median-price growth went from 11% year over year in Q1 to a 2% decline in Q2. House medians continued to rise, by 6% and then 5%. This does not mean an unchanged condo lost 13% between quarters: different homes sold in different seasons. It does show that the condo price signal weakened much more abruptly as supply returned. [Q1 2026 regional market release] [Q2 2026 provincial and regional market release]

Scarcity is still a cushion

Q2 average active listings totalled 824, still 22% below the ten-year norm. Houses sold in 34 days on average, condos in 50 and plexes in 44. That shortage limits the case for a sweeping price-collapse forecast. The more defensible reading is a market becoming selective: a condo competes against a different set of alternatives from a house, and a peripheral listing faces a different sales trend from one in Sherbrooke itself. [Q2 2026 provincial and regional market release]

The national rate story meets a provincial demand problem

APCIQ attributes part of Quebec's Q2 slowdown to weaker prime-working-age employment and slower population growth. Those forces can reduce the flow of first-time and relocating buyers even where the stock of available homes remains low. September's 2.25% Bank of Canada rate hold offers no automatic offset: the Bank also reported higher long-term yields since July. In Sherbrooke, a tightening buyer budget could therefore weaken condo demand before it produces an obvious surplus of houses. Neither the provincial report nor the rate decision measures that local causal effect directly. [Q2 2026 provincial and regional market release] [Bank of Canada September decision]

Forecast for the next two quarterly reports

The base-case forecast through March 2027 is that condo price growth will trail house price growth, while the city's sales trend remains firmer than the outer metropolitan municipalities. It assumes no sharp local employment shock and no abrupt fall in fixed mortgage offers. A return of condo growth above house growth, alongside a narrowing supply gap, would weaken the first call; peripheral sales outperforming the city in both upcoming quarterly reports would overturn the second. Rising supply across every category would instead point to a broader adjustment than the current evidence supports. [Q1 2026 regional market release] [Q2 2026 provincial and regional market release] [Bank of Canada September decision]