It’s a seller’s mar­ket as home prices rise in city

It’s now a seller’s mar­ket for sin­gle fam­ily homes

Montreal Gazette - - FRONT PAGE - JA­COB SEREBRIN jsere­brin@post­media.com

House prices in the Mon­treal re­gion have reached a new high, ac­cord­ing to two re­ports re­leased on Thurs­day.

The ag­gre­gate price of houses and con­dos rose to $384,055 dur­ing the three-month pe­riod that ended on Sept. 30, ac­cord­ing to the Royal LePage House Price Sur­vey.

That’s a 6.6 per cent in­crease from the equiv­a­lent pe­riod last year and up 3.2 per cent from the pre­vi­ous quar­ter, ac­cord­ing to the sur­vey, which is based on Royal LePage sales data.

Those in­creases are im­por­tant, said Do­minic St-Pierre, Royal LePage’s se­nior di­rec­tor for the Quebec re­gion.

“If you look at the last 25 years, there’s just two years where there was an ac­tual de­crease in price year over year. Prices are usu­ally go­ing up,” he said. “Now, we see that the in­crease in prices is ac­cel­er­at­ing a bit.”

While prices are in­creas­ing quickly by Mon­treal stan­dards, he said, the in­creases are much health­ier than those seen in cities like Toronto and Van­cou­ver. Here, he said, price in­creases are be­ing driven by un­der­ly­ing eco­nomic growth, rather than spec­u­la­tion.

Cen­tral Mon­treal saw the big­gest price growth, St-Pierre said.

The me­dian sell­ing price of two­s­torey houses there grew 7.2 per cent over the quar­ter to $740,214. That’s an in­crease of 19.2 per cent from the equiv­a­lent pe­riod in 2016.

It’s now a seller’s mar­ket for sin­gle fam­ily homes, he said, and sup­ply is go­ing down quickly.

“On the condo side, we just en­tered a bal­anced mar­ket. That al­most seemed im­pos­si­ble just a year ago” due to a level of in­ven­tory that was ex­pected to last for mul­ti­ple years, he said.

While the Bank of Canada in­creased in­ter­est rates twice over the sum­mer, and is ex­pected to do so again, St-Pierre said he doesn’t ex­pect that to slow Mon­treal’s hous­ing mar­ket.

“Be­cause the mar­ket is so strong, be­cause the de­mand is so strong, there’s a strong pres­sure on sup­ply and that’s why we think that, no mat­ter the in­crease in in­ter­est rates,” he said, “the mar­ket is go­ing to be pretty strong over the com­ing year.”

An­other re­port, which uses a dif­fer­ent method­ol­ogy, is also show­ing growth.

The Ter­anet–Na­tional Bank Hous­ing Price In­dex for Mon­treal, which mea­sures the sell­ing price of homes that have pre­vi­ously sold more than once, rose 0.27 per cent in Septem­ber.

It was up 5.76 per cent from the equiv­a­lent pe­riod in 2016.

That in­dex, which uses June 2005 as a base, reached a new high for Mon­treal in Septem­ber: 159.68. That means that prices have risen 59.68 per cent since June 2005.

The in­dex at­tempts to con­trol for fluc­tu­a­tions in me­dian prices that can come as a re­sult of the mix of houses sold dur­ing a given pe­riod by com­par­ing the sell­ing price of in­di­vid­ual prop­er­ties to the price those prop­er­ties sold for in the past, which might lead to dif­fer­ent re­sults from other meth­ods.

St-Pierre said the big­gest sur­prise in the Royal LePage House Price Sur­vey was the in­crease in the num­ber of for­eign buy­ers in Mon­treal as a re­sult of new taxes in Van­cou­ver and Toronto.

This year, St-Pierre said, the num­ber of buy­ers from China will prob­a­bly sur­pass those from France, which had been the sec­ond-largest group of for­eign buy­ers af­ter Amer­i­cans.

Still, St-Pierre said he be­lieves in­ter­na­tional buy­ers still ac­count for less than two per cent of all pur­chasers.

“It still doesn’t have a huge ef­fect on the over­all mar­ket,” St-Pierre said. But that could change if the num­ber of for­eign buy­ers con­tin­ues to grow.

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