Builders can barely keep up with demand for condos
More condos are being built in Montreal than ever before, but analysts say it’s still not enough to keep up with demand.
In the last month, Montreal set new records in both condo sales and price. Experts say the surging interest in condos is driven both by local buyers and increasing interest from investors outside Quebec.
According to Altus Group, a consulting company that provides market insights for condo developers, pre-construction sales of new condos in Montreal reached a peak this year. A recent report found that March sales volume downtown was up 188 per cent compared with the previous year.
The fastest-growing segment? Luxury condos.
Not coincidentally, the sale of an $8-million condo this year has established a new high benchmark for condo prices in Montreal. According to Sotheby’s International Realty Quebec, the pre-construction sale of the luxurious 4,015-square-foot pad at the Four Seasons Private Residence commanded the highest price per square foot for a condo in the city’s history.
Data provided by Sotheby’s found that sales of luxury condos over $1 million were up seven per cent in the first five months of 2018, compared with the same period last year, with the vast majority of these units selling between $1 million and $2 million.
While real estate agents are seeing more investors from other provinces and countries buying Montreal condos, it’s local buyers who are snapping up most of the large, high-end units in the most desirable locations, according to brokerage vice-president Sacha Brosseau.
“The first thought at those price points is that the money will be coming from international buyers, but we’re actually seeing a lot of local buyers,” Brosseau said of the Four Seasons project.
Local buyers were also driving brisk business on the opening day of the sales centre for the second phase of the three-tower Flora condominium project at VillaNova in Lachine last Saturday. According to sales director Kim Bruno, more than half of the project’s 177 units sold in just six hours.
Bruno’s been in the condo sales business for 10 years, and she said she has never seen a project outside the downtown core sell so quickly. For a project in Lachine, she said, they had expected to sell up to a quarter of units on opening day.
Buyers were mostly young professionals between 25 and 45 drawn to the project because of its community-oriented amenities, location near the waterfront and easy commute downtown, Bruno said.
“I’ve sold new construction in Griffintown in 2011 and 2012. Most people then were investors looking to make money in the Montreal area, but in this project people are looking to live in a new area in the city. They have a vision of what community should look like,” she said.
Altus adviser Vincent Shirley said the recent surge in interest in Montreal condos is due both to a buoyant local market and interest from investors from the rest of Canada and abroad.
Economic optimism in Montreal is high, he said, and unemployment is low. Buyers also want to take advantage of historically low interest rates and still inexpensive prices compared with other Canadian centres like Toronto or Vancouver.
The pace of condo-building is increasing in Montreal, but demand is still expected to outpace supply in the near future, Shirley said.
It’s looking like the condo boom has only just begun.
“I’m not worried there will be too many condos,” Shirley said.