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Best Real Estate Investment Opportunities in Montreal – 2018

Montreal's real estate market has been viewed optimistically in 2018 by financial and market analysts across Canada.

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This post has been updated. Read the latest version, Real Estate Investment Opportunities In Montreal: 2019.

Montreal’s real estate market has been viewed optimistically in 2018 by financial and market analysts across Canada, who point to the city’s affordability and growth as a promising investment prospect.

According to PWC’s latest report, multi-purpose condo projects and rental projects are seeing success in Montreal, and are expected to dominate the market in the upcoming year. The senior market is one to look out for – more than half of PWC’s survey interviewees recommended investing into the “age-restricted housing” sub-sector. PWC’s survey respondents rank Montreal the No. 3 market to watch in Canada for real estate prospects, after Vancouver and Toronto.

The Greater Montreal Real Estate Board (GMREB) also noted Montreal as a re-emerging force in Canadian real estate. The city is increasingly attractive to oversea buyers, attracting investors from Europe (mainly France) and other countries wishing to avoid Ontario’s 15% Homebuyer tax. Canadians from other provinces are also looking towards the city, in response to growing un-affordability in Vancouver and Toronto.

This article looks at the most interesting real estate investment opportunities in Montreal, based on the latest market data and statistics from Centris, GMREB, and other housing market reports.

Investing in the rental market 

Montreal’s rental market remained strong last year, with just over 44% of the population residing in rented accommodation. The average vacancy rate remained low at 1.7%, a 1% decrease at the provincial level. The average rental price of a 2 bedroom condo in the GMA was recorded at $1,180. Other than bachelor condos / studios, all other types of rental condos saw an increase in their average rental price in 2017. Overall, the strength of the labor market and immigration has balanced out an increase in supply this year, keeping the local rental market stable.

Montreal’s rental market report for the end of 2017 showed that condominiums displayed a particularly strong share of the rental market.

Best Real Estate Investment Opportunities in Montreal - 2018
Montreal 2017 Rental Market Report.

Related: How is Montreal’s rental market performing in 2018?

Making a smart buy-and-hold investment

When buying a primary residence or any other type of buy-and-hold investment, it is important to choose a property in a neighbourhood with strong resale value and high appreciation rates.

Currently, single family homes are appreciating at the fastest rate – 6% year over year. The average single family home in Montreal’c CMA reached $310,000 in February 2018. Comparatively, the median price of a condominium increased by 4% this year, and the average ‘plex appreciated by 3% to $459,000 (JLR).

How to calculate future appreciation value

Best Real Estate Investment Opportunities in Montreal - 2018
Top 10 Single Family Homes in Montreal Under $500,000

Condominiums are the fasting selling property type

Condominiums were the only property type to show an increase in sales volume this year – 13% up to 1,177 units in February 2018.

In 2017, the following neighbourhoods showed an above average appreciation of condos (above 3%):
Outremont (6%), Cote des Neiges / NDG (8%), Lasalle (4%), Ville Mont Royale (9%) Pierrefonds-Roxboro (5%), Pointe Claire (7%), Rosemont (6%), Saint Laurent (4%), Verdun/Nun’s Island (8%), Villeray (6%)

Buying a revenue property (duplex or multiplex)

There are several advantages to buying a revenue property – an investor can subsidize their mortgage and housing costs while living in one of the units, or pick up two income revenues on what is effectively one property.

When it comes to the multi-suite residential property market, demand has kept in pace with supply over the past few years. The vacancy level was expected to settle at 4.1% in October 2017, 20 bps higher than the 3.9% in 2016. Average vacancy was highest in the bachelor market segment. International migration has been a boon for this sector, a demographic that has typically rented for the first year as a landed resident. Average rental rates continued to grow, despite a flat vacancy curve. Investor confidence was evidenced in the high number of transactions recorded in the multiplex market: $724 million in the first half of 2017. High rise condos in central locations, and with low vacancy rates, garnered the most attention and peak pricing from investors this year. The sector is expected to continue growing at a healthy rate. (Morguard)

Best areas to invest in for appreciation and resale value

Verdun, Rosemont, Ville Mont Royale, Lachine were among the best areas for property value growth in 2017.

Read our full report on the best areas in Montreal for appreciation.

Commercial real estate market

Montreal’s commercial real estate market is also booming, according to Morguard’s latest report.

“While Vancouver and Toronto are expected to hold their titles as the hottest investment markets in Canada, limited supply of properties and skyrocketing prices will force investors to look for opportunities in other markets. Notably, Montreal, Ottawa and suburban Toronto are expected to see a boom in 2018. Alberta is also showing signs of reanimation after a period of sharp depression. When it comes to the multiplex market, demand has kept in pace with supply in the GMA. High rise condos in central locations, and with low vacancy rates, garnered the most attention and peak pricing from investors this year. The sector is expected to continue growing at a healthy rate.”

Other considerations for first time real estate investors

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