Montreal real estate market displays 'unusual vigour' into November!
22 Nov 2019
Autumn’s chills have done nothing to dampen real estate activity in Montreal.
Transactions and average prices in the Montreal metropolitan area climbed yet again last month while selling times shrank, according to the latest data from the Quebec Professional Association of Real Estate Brokers. Dwindling supply remains an issue, as evidenced by monthly and quarterly figures. The metropolitan area includes the island of Montreal, Laval, the South Shore and northern suburbs as far away as Mirabel.
“It’s fair to say the market is overheating,” Charles Brant, director of market analysis at the association, said Thursday in a telephone interview. “Prices are rising, and the pace of sales is quickening. It’s unusual to see this vigour persist so late into the year.”
Appetite for real estate is being propped up by low interest rates and a vibrant Quebec economy, which supports wage increases and buying power. Positive immigration flows and a relative dearth of properties in central Montreal neighbourhoods such as Mile End, Rosemont and the Plateau are also playing a key role, Brant said.
“In a way, Montreal is a victim of its own success,” he said. “There is a scarcity effect at play. Yes, new housing is being built, but it’s often for rental units. The supply deficit should likely persist for the next two years.”
October marked the 49th consecutive month in which the number of properties for sale declined, QPAREB data show. About 16,900 residential properties were listed on the Centris system in October, a 20-per-cent decrease from the same month a year ago. This is the largest drop for the month of October since 2002.
This persistent scarcity is one of the main reasons the association expects the market to remain strong into 2021.
“We’re forecasting somewhat of a slowdown next year, but there will continue to be supply deficit,” Brant said. “Interest rates are going to remain low, which means 2020 should still be a good year for real estate in Montreal.”
Interest rates on five-year mortgages averaged 5.19 per cent in the third quarter, association data show. That’s less than the 5.34-per-cent average recorded in the year-earlier quarter
Single-family homes outshone other types of properties in October, posting an eight-per-cent median price increase to $355,000, the data show. Plexes — defined as properties with two to five dwellings —– saw their median price climb seven per cent to $560,000, while condominium prices advanced six per cent to $280,000.
As always, the aggregate figures hide vast disparities between city sectors. The areas analyzed by the association often group together several city boroughs.
For the third quarter, single-family home prices rose the fastest in Côte des Neiges/Côte St-Luc, according to the association. The median home in the area sold for $776,168 in the period, a 22-per-cent jump from last year’s third quarter.
Sud-Ouest, which includes Verdun, ranked second on the island of Montreal with a 20-per-cent increase, followed by Lachine/LaSalle at 14 per cent. Single-family homes in Sud-Ouest sold for $658,000, while the median price in Lachine/LaSalle was $500,000, the data show.
