Montreal's hot housing market is still affordable, Quebec says
25 May 2021
The hot Montreal housing market was just added to the Bank of Canada’s watch list, but the Quebec government isn’t worried, at least not yet.
Low interest rates and a pandemic-led rush for extra space have dramatically pushed up prices for residential real estate, and the Quebec government is “paying close attention,” Finance Minister Eric Girard said in an interview.
Even as homes in Montreal become more expensive, the fundamentals of the market remain “really strong,” Girard said, noting that prices are still much cheaper than in cities like Toronto and the economy is enjoying a strong recovery. “It’s still an affordable city,” he said.
The median price for a detached house climbed 18 per cent in metropolitan Montreal last year and was up 31 per cent in the four months through April, to $473,000 (US$391,000), according to the Quebec Professional Association of Real Estate Brokers. Condo price increases weren’t far behind, up 23 per cent.
Girard said he welcomes moves by the banking regulator and by Quebec’s financial regulator to tighten lending qualification rules. The province, Canada’s second-largest, is considering its own measures to ensure house hunters don’t waive property inspections to win deals against other bidders, he said.
Eric Girard, Quebec's finance minister, speaks during the RDV 2018 conference in Montreal, Quebec, Canada, on Monday, Nov. 19, 2018. (Bloomberg News)
“We want to be really sure that buyers remain prudent,” Girard said.
Montreal was one of three Canadian urban markets the central bank flagged Thursday as showing excess “exuberance,” a notable distinction in a country where real estate is soaring almost everywhere.
The Canadian Real Estate Association’s Home Benchmark Price in Montreal was $483,200 in April, versus $1 million in Greater Toronto and $636,000 in Ottawa.
