Montreal housing finally sees life
MONTREAL • Montreal housing sales may not be booming like Canada’s other largest cities, but they did rise by five per cent last year — the first time the city has seen an increase since 2010 and a trend the Quebec Federation of Real Estate Boards expects to continue through 2016.
The QFREB says this uptick in residential real estate sales for Canada’s secondlargest city is largely the result of historically low interest rates encouraging pro- spective buyers to take out mortgages, coupled with an improvement in Montreal’s job market in spite of Canada experiencing a recession during the first two quarters of 2015.
“The residential real estate market’s upturn in 2015 will continue in 2016, at least during the spring period, which is the most active time of the year for buying a property,” said Paul Cardinal, manager of the QFREB’s Market Analysis Department after presenting results in Montreal last Thursday.
There was also a three per cent bump in Montreal-area housing prices, to an average of $ 295,000, a timid increase compared to Toronto and Vancouver, Canada’s first- and third-largest cities, where prices rose last year by 9.8 per cent and 18.9 per cent, respectively, according to the cities’ real estate boards.
Single-family units are expected to increase in price by another two per cent in 2016.
Montreal also seems to be settling into its condominium market, where an oversupply has created a buyer’s market that is expected to result in only a one per cent increase in 2016 prices.
The good news, Cardinal says, is that Montreal condominium starts dropped by 25 per cent in 2015, which will allow the market to absorb some of the oversupply.
Cardinal says that unlike Vancouver and Toronto, Montreal does not have a large number of customers purchasing properties as investments, though the city could offer opportunities to foreign buyers.
“Because the Canadian dollar is very low right now, it could be an advantage for someone who comes from another country,” he said.
Analysts are not quite as optimistic about 2016. Desjardins expects Quebec housing sales will increase by two per cent this year, while RBC predicts a rise of just 0.5 per cent.
All of this, they say, relies on economic performance in the coming year, which may be buoyed by stronger U. S. import demands at a lower Canadian dollar. This is something that could be beneficial to the relatively large amount of export- focused manufacturing in the Montreal area.
“If there was a market correction, banks could become very cold,” said Robert Hogue, a senior economist at RBC.