The housing market in Toronto is slowing down and Vancouver’s housing prices are no longer increasing as fast as before. Experts now point to Montreal as the up and coming leader in the real estate market in Canada. In May, Montreal posted record-high sales, soaring 15% from the same month in the previous year. This is the city’s highest volume since before the 2008 financial crisis.
The prices of single-family homes have increased 6% compared to the past year. Condos for sale in NDG and other key areas are also doing very well. While the number may not seem like much compared to the double-digit price growth that Toronto is experiencing, it’s a big change for Montreal, considering that for several years its housing market had been treading water.
In January, Montreal’s real estate board predicted 1-per-cent price growth for 2017. Currently, it’s expecting a growth of 6%.
After Ontario implemented a 15% foreign buyers’ tax in Toronto, investors started wondering if Montreal would be the next target for foreign investors. Even during that time, it had already been drawing affluent European migrants. So far, however, there’s minimal proof of a rush from Asian investors seeking to avoid the foreign buyer taxes in the Greater Toronto Area.
When Vancouver introduced the foreign buyers tax last year, Montreal started seeing more Asian investors although it had very little impact on demand. Things may change with the implementation of the foreign buyer tax in Toronto.
Furthermore, the strong job growth, confidence in the economy, and the constantly growing migrant population are considered the main reasons for the growing real estate market in Montreal. It remains significantly more affordable than Vancouver and Toronto, with the median price of a single-family home being $319,000 compared to the $1.1m price for a comparable property in Toronto. It’s really not surprising that Montreal is now the deemed as the hottest market in the country.
Being the second-largest city in Canada, the demand for real estate grew, allowing the prices of homes to grow 6%.
In 2016, non-Canadian real estate buyers in Montreal made up 1.3% of the market. This is higher compared to the 0.7% it got in 2013, according to Ottawa housing agency, CMHC. The number is expected to increase to 1.5% in the coming months.
Meanwhile, the Toronto Real Estate Board estimated that there were less than 5% foreign buyers last year, a stark decline due to the implementation of the foreign buyer tax. In Vancouver, foreigners made up 16.5% of property buyers, but the number fell to a dismal 1.8% a month after British Columbia imposed a tax.
As mentioned, Montreal remains the most affordable option for housing, compared to Toronto and Vancouver, with average prices about a third of the costs of comparable properties in these key cities.
The previous low forecast for Montreal made by Quebec’s real estate board stemmed from concern for the possible impact of stricter federal mortgage guidelines introduced last year. But it did not happen. The last time Montreal’s home prices declined was in 1996 and the city has not achieved double digit increase in prices for single family homes since it saw a 10% jump in 2007.
Today, the market looks very promising. Houses get sold very fast and any property with the right price gets multiple offers right away.
If you’re considering investing in real estate in Montreal, now is definitely the right time to do so. Check out your options while the prices of homes are still generally affordable. We don’t think it will stay this way for long.