THE STATE OF MONTREAL’S CONDO MARKET
While the strong market for single-family homes has dominated headlines in recent months, Montreal’s condo market has been quietly surging, with sales up 39 per cent in the Ville-Marie borough for the second quarter of 2017. This growth has persisted over the summer, but some experts predict the market will stabilize by the end of the year. That said, the amount of new constructions expected on the market, combined with interest from investors and foreign buyers, may keep Montreal’s condo market simmering for years.
“I’ve sold over 25 condos in the last 60 days,” said Saguy Elbaz, real-estate broker with Sotheby’s International Realty Québec. “New constructions are on fire, selling at prices Montreal has never seen before; the resale market is also doing well on low-priced units up to $350,000.”
Based on current plans, it’s safe to say that for the next four to five years buyers can expect a steady flow of new condo constructions being delivered in Montreal. With most of the new highrise buildings in the downtown core selling out, the appetite for high-end projects is somewhat unprecedented in this city.
“There’s an abundance of options and new projects being introduced regularly, but good locations are selling out in record time and at record prices,” Elbaz said. “The demand is huge among foreign investors, first-time buyers, and empty nesters downsizing, and it’s driving prices up.”
The current market is definitely a sellers’ market, said Beatrice Baudinet, real-estate broker with Royal LePage Heritage.
“Even though there is a saturation of condos, people are still buying,” she said. “The market is going up, there is a constant flow of construction and sale of condos; it’s a steady rise every year, and we forecast that it will continue like this.”
The current trend is due, at least in part, to out-of-town buyers.
“The prices in Montreal are reasonable compared to other Canadian cities, but outside investors, foreign buyers and those from other Canadian cities value Montreal properties differently than we do, and that increases the price,” she said.
“It was an unexpectedly strong summer, and we predict this trend will continue and we will have a very busy fall.”
While the short term is expected to bring more of the same, some experts do forecast the condo market will stabilize over the next few years.
“I foresee an adjustment in condo prices for higher-end constructions between now and 2019,” Elbaz said.
“I sometimes have a hard time selling for $400 per square foot in the resale market, but one block away new constructions are selling for $700 per square foot. I don’t think it can last; Montrealers can’t afford it.
“Can foreign investors keep these buildings filled forever? That’s to be determined.”
Over time, unique projects in great locations will continue to blossom, while overpriced condos in condensed areas with plenty of supply will take a hit, he added.
While the high-end market may be abuzz, there are still opportunities for buyers looking to invest in condos, no matter their budget.
“Long term, condos are still considered a good investment property,” Baudinet said.
There are three basic ways to make a profit when investing in a condo, Elbaz said.
“Buy a new construction, not a luxury unit, in a good location and either hold it for a while or rent it out; buy unusual, rare, or unique properties that someone will one day pay top dollar for; or, buy an existing unit in a good building, in a solid location, and add value to it by doing some renovations.”
If you’re considering entering the condo market, as a first-time buyer or otherwise, getting some professional advice can go a long way. Consulting with a broker is free for buyers, and can lead to valuable revelations, and helpful guidance.