April 22, 2017
In total, 11,138 residential sales were concluded in the first quarter of 2017, a 6% increase compared to the first quarter of last year. With that many transactions, the CMA residential stats for Montreal’s real estate market continued its upward trend by registering its best first-quarter sales result in five years. This was also the 11th consecutive quarterly increase in sales.
Among the three property categories, condominiums registered the largest sales increase at 14%. Sales of single-family homes registered a more modest increase of 2%, while sales of plexes (2 to 5 dwellings) were unchanged compared to the first quarter of last year. All main geographic areas of the Montreal CMA registered an increase in sales:
Vaudreuil-Dorion (+9%) and the Island of Montreal (+8%) posted the largest increases, followed by the North Shore (+7%), Laval (+3%) and the South Shore (+1%). High-end properties remained in demand at the start of the year in the Montreal CMA, as sales of properties at $500,000 or more jumped by 22% compared to the first quarter of 2016. This market segment has performed better than the overall market for the past 11 quarters.
Across Montreal’s real estate market, the median price of single-family homes ($300,000) and condominiums ($240,000) increased by 5% and 4%, respectively, while that of plexes ($461,000) rose slightly by 1%. The median price of single-family homes rose by 9% on the Island of Montreal ($429,000). This was the largest increase among the main areas of the CMA and the best result in almost six years. The South Shore also stood out in the first quarter, as the median price of condominiums grew by 5% to reach $204,000.
The number of active listings fell for a sixth consecutive quarter with 29,629 properties for sale across the CMA, a 13% decrease compared to the first quarter of last year. The supply of single-family homes and plexes dropped by 18% and 15% respectively, while that of condominiums fell by 8%.
Montreal’s economy is poised to achieve its best growth in five years, with manufacturing, financial services, and business services all having a healthy outlook. The region’s GDP is projected to stay at a stable 2% in 2016 and 2.1% in 2017, according to the Conference Board of Canada. Despite high vacancy rates for office space —11% downtown and 17% in the suburbs as per the Conference Board of Canada— demand for Leadership in Energy and Environmental Design certification remains high.
Montreal continues to absorb the city’s condo stock, and “pure” condominium plays have given way to mixed-use developments. More of these are on the horizon, especially around transit hubs, and the trend is increasing cooperation between investors and developers. Interesting news for the Montreal’s real estate market.
In various reports published since Q4 2016, predictions were released for Canada’s housing market, based on the results of an extensive industry survey. The study finds that, investors, developers and property owners are cautiously optimistic about the Canadian real estate market’s outlook for the year ahead. The hot markets: Toronto and Vancouver, continue to experience high demand and low supply. This has driven up prices and caused pricing concerns. However, every regional market offers opportunities for savvy developers and investors—as long as they embrace technology and anticipate their future buyers’ needs. So far this seems to be the case with Montreal’s real estate market.
From baby-boomers to millennials, Canada’s demographic populations continue to grow, and their needs are evolving. Mixed use projects (combining residential, retail, and commercial components) are foreseen to play a more important role in the coming year. Developers in Montreal’s real estate market have picked up on the growing popularity of these buildings, and have responded by continuing to rethink and further develop their approach to mixed-use projects.
Housing affordability has become a point of concern in several markets in Canada. Natural growth and immigration over the next five years will keep demand high, putting even more pressure on affordability unless more supply is made available. Red tape and lengthy approval processes also contribute to limiting supply and driving up costs, in most regions covered by the study.
Technology is changing expectations, as well as the nature of communication between tenants, landlords, sellers, buyers, and brokerage firms in Montreal’s real estate market. The consensus among respondents was that tech is now essential in the real estate industry. If we aren’t learning to harness and integrate internet tools into our interactions, then opportunities are being missed.
Canada’s economic performance appears to have rebounded from a weak 2015. The country’s economy continues to realign itself in the wake of falling oil prices, as job losses in natural resources have been offset by employment gains in manufacturing and construction. Similar trends in Quebec should play a part in Montreal’s real estate market in coming months.
Housing starts nationally were forecast to fall to 184,500 units in 2016, down from 194,700 and below the 20-year average, according to the Conference Board of Canada. Housing affordability, weak income growth and high consumer debt levels all add to the dip in residential starts.
For expert advice and guidance in Montreal’s real estate market, and to protect your investments, consult a licensed expert Real Estate Broker at KW Prestige. Just call 514-426-0047 or e-mail firstname.lastname@example.org today.