Real estate market still hot despite August dip in prices

Housing prices in Montreal were down in August, when compared with the month before, but remain higher than they were in August 2016.

The Teranet-National Bank National House Price Index, which tracks the resale price of houses, condos and townhouses, was down 0.09 per cent in August, when compared with July.

However, the index was up 3.96 per cent over the year before.

The slight dip is a regular fluctuation and unlikely to start a trend, said Marc Pinsonneault, a senior economist at the National Bank of Canada.

“The four per cent that you see on a year-over-year basis, to me, is more revealing of the underlying trend,” he said. “The market is hot this summer.”

Sales in August were up eight per cent from the previous year, according to the Greater Montreal Real Estate Board.

Sales have been up on a yearover-year basis for 29 of the past 30 months, while the number of new listings has fallen steadily since late 2015. That combination puts upward pressure on house prices and gives sellers an advantage.

“The market is a seller’s market, even for condos,” Pinsonneault said. “There’s been a remarkable improvement in the home resale market throughout 2016 and the first half of 2017. The market looks very good.”

The Teranet-National Bank index, which uses June 2005 as a base, was 159.25 in August, which means prices have risen 59.25 per cent since June 2005. Since the beginning of 2017, prices have risen 5.47 per cent.

Pinsonneault said he thinks the year-over-year increase of almost four per cent is a good sign — it gives homeowners a “fair return” without making the market too unaffordable for new buyers, as has been the case in some other major Canadian cities. “We have a good situation and a situation that can remain sustainable,” he said.