Montreal is sexy and its housing market is expected to break records in 2020.
https://youtu.be/XIGZU1ELguw
Quebec as a whole is outperforming the rest of Canada. Yet housing
affordability has deteriorated and is now approaching “critical levels,”
an economist warns.
Frédéric Tomesco
Updated: January 23, 2020
Get ready for another strong year in Montreal real estate.
Residential property sales in the greater Montreal area are set to
climb six per cent this year to a record 54,600 units, according to a
forecast released Thursday by the Quebec Professional Association of
Real Estate Brokers. The group, which represents more than 12,700
brokers and agencies, is also forecasting six-per-cent increases in
condominium and single-family home prices for 2020.
“Montreal has
entered a phase of exuberance,” Charles Brant, the association’s head
of market research, said Thursday at a presentation attended by property
brokers and reporters. “There is a clear lack of supply.”
A
record 51,329 properties were sold in greater Montreal last year, a
10-per-cent jump from 2018, the association said, citing data from the
Centris system. This marked the fifth consecutive annual increase of
more than five per cent. The transactions had a combined value of $20.3
billion, 15 per cent more than in 2018.
Full employment, rising
disposable income, low interest rates, positive migratory flows and
government incentives for home ownership are all contributing to the
expected growth in real-estate demand. Still, an anticipated slowdown in
economic growth — combined with labour shortages — could negatively
impact job creation and prevent Quebec’s economy from reaching its full
potential, the association said.
Activity last year was
particularly sustained in some outlying municipalities, as evidenced by
increases of 21 per cent in St-Jean-sur-Richelieu, 15 per cent on the
South Shore and 14 per cent on the North Shore. Sales in Laval jumped 13
per cent, outstripping the four-per-cent gain posted by the island of
Montreal.
All major property types recorded price increases.
Plexes, defined as properties of two to five dwellings, rose seven per
cent to a median price of $550,000. Single-family home prices advanced
six per cent, to $340,000, with condominium prices climbing five per
cent to $267,900.
Housing affordability in Montreal has
deteriorated and is now approaching “critical levels,” Hélène Bégin,
economist at Mouvement Desjardins, told attendees. The city’s
residential market is showing signs of overheating, and “a risk of
overvaluation exists, though we’re not there yet,” Brant added.
Bidding wars are now an inescapable reality, especially in the central
neighbourhoods. Thirty-nine percent of single-family homes sold in
Rosemont last year elicited bidding wars, while the proportion in
Villeray was 36 per cent, Brant said, citing QPAREB data.
Non-residents now account for about 15 per cent of all residential
transactions in the downtown core, Brant said. The figure reflects
Montreal’s newfound popularity among foreign investors, according to
Patrice Groleau, who owns the McGill Immobilier and Engel & Volkers
real-estate agencies.
“There’s never been this much money in
Montreal,” Groleau said at the event. “Montreal is sexy. People from all
over the world want to come and live here.”
Anecdotally, Groleau
said one of his brokers recently took on his first $1-million property
mandate in Hochelaga-Maisonneuve, which has traditionally been one of
Montreal’s poorest districts.
Quebec as a whole is outperforming
the rest of Canada. Residential property sales in the province rose 12
per cent last year, with median prices for single-family homes climbing
four per cent, compared with increases of six per cent and 2.5 per cent
respectively for all of Canada.
More than 96,500 residential
properties changed hands in Quebec last year, a new record, and QPAREB
predicts the 2020 total will top the 100,000 mark for the first time as
median prices for single-family homes advance five per cent.
Active listings across the province fell 12 per cent in 2019, settling
at the lowest level since 2010. It took an average of 97 days to sell a
home in the province, the smallest figure since 2012. Montreal-area
properties sold even faster, averaging 71 days on the market, amid a
19-per-cent plunge in active listings.
Those numbers firmly put
Montreal — and all of Quebec — into “seller’s market” territory. A
region or area is deemed to be a seller’s market when fewer than eight
months are required to sell the housing inventory.
ftomesco@postmedia.com
