Montreal home sales hit 10-year high in 2017

Montreal was one of Canada’s hottest real estate markets last year, as economic growth and low unemployment translated into the area’s best sales growth in a decade.

Total sales in the Greater Montreal Area increased eight per cent to 44,448 on the strength of condominium sales and good overall activity on the Island of Montreal.

Sales growth exceeded 20 per cent in five of the city’s most popular boroughs.

That compared with sales decreases of 18 per cent in the Greater Toronto Area and 10 per cent in Greater Vancouver.

Unlike Toronto and Vancouver, Montreal doesn’t have a foreign buyers’ tax.

More than 14,000 condos changed hands across the Island of Montreal and nearby communities during the year, marking a 17 per cent increase from 2016.

“It’s on fire,” said Paul Cardinal, manager market analysis for the Quebec Federation of Real Estate Boards.

The overall sales growth far exceeded his expectations. He said the last time growth in Montreal sales outpaced Toronto and Vancouver was in 1998.

Cardinal thought new mortgage rules implemented in the fall of 2016 would impair the number of first-time buyers and reduce the total number of transactions. But Quebec’s best consumer confidence in 15 years and a high number of permanent residences stimulated demand and compensated for the new rules and higher mortgage rates during the summer.

Transactions of single-family homes rose three per cent to 25,601, while sales of buildings with two to five units increased six per cent to 4,336.

Demand was particularly strong for luxury accommodation. Sales of homes exceeding $1 million rose 20 per cent in Greater Montreal, and condos priced above $500,000 were up 42 per cent.

The total value of sales grew 13 per cent to $16.2 billion, about half of which was on the Island of Montreal. The average price of homes in the Greater Montreal Area increased nearly six per cent to $364,510. That was the largest increase since 2010, with single-family homes sustaining the greater price increases.

Prices rose 6.1 per cent to $467,496 on the Island of Montreal, which includes Canada’s second-largest city and suburbs.

Cardinal said the number of foreign buyers, particularly from China, has grown, but remained marginal overall. They were mostly concentrated in wealthier neighbourhoods and the downtown core.