Where is Montreal’s real estate market headed in 2019? Here’s what we know so far, based on industry reports and statistics.
CREA Canadian Real Estate Outlook – 2019
The Canadian Real Estate Association has forecast modest price growth on a national level in 2019. Housing starts are projected to level off by 2020.
- MLS sales in 2019: 497,400 (high) – 478,400 (low)
- Average MLS price in 2019: $521,600 (high) – $501,400 (low)
In the Montréal CMA, we can expect vigorous construction in the condo and rental apartment segments. Real estate sales will continue increasing until 2020. Market conditions will continue to favour sellers, which means that prices will continue growing in response to heavy competition. Growth in the average price of homes will be higher than the annual average of the last few years, which was about 2.5%.
Market growth in prices, sales and new starts is forecast for all other Quebec CMAs in the coming two years with the exception of Sanguenay, where the market is expected to remain stable.
QFREB Residential Real Estate Forecast – 2019
QFREB is optimistic about 2019, due to a strong labour market, rising disposable income, and high consumer confidence. The real estate market is expected to continue its upward trend in the first half of 2019, with a slight slow down in the second half due to rising interest rates. Five year mortgage rates are expected to increase by half a percentage point towards the end of 2019, up to 6%.
The QFREB predicts a modest 1% increase in the number of transactions in 2019 (Canada-wide), up to a new record of 87,650 sales.
Prices of single-family homes are expected to increase by 3%, to $257,000.
QFREB expects Montreal’s residential real estate market to perform better than the rest of Quebec next year, due to stronger population growth and net migration rates.
The number of residential real estate transactions are expected to hit a new high of 47,600 in 2019.
Appreciation rates will also be better in Montreal compared to elsewhere in Quebec. Single family homes are forecasted to increase by 4% to $332,000. The average condominium is expected to rise by 3% in price to $263,000.
PWC Emerging Real Estate Trends – 2019
PWV expects Vancouver and Toronto to continue leading Canada’s real estate markets, with Montreal falling behind in third place.
When it comes to Canadian real estate trends, blockchain, machine learning, predictive analytics, real estate startups and virtual reality are expected to push innovation forward.
Supply will continue to tighten in the single family home segment, especially in Toronto and Vancouver. PWC sees furthered interest in the condominium segment, as detached houses become increasingly out of reach both in terms of availability and affordability.
Top Neighbourhoods to Watch in 2019 – Centris Statistics – 2019
According to Centris data for 2019, heightened performance is expected in:
- Hochelaga-Maisonneuve – Affordable prices, condo appreciation of 10%
- Cote des Neiges – Single family home appreciation of21% (#1 top performer in Greater Montreal Area
- Pointe St Charles – Condo appreciation of 10%
- West Island South – Condo appreciation of 20%
- Villeray – Single family home appreciation of 13%, condo appreciation of 10%
- Notable for duplexes and multiplexes: Lachine / Lasalle, Ville Émard
- Notable suburban areas: Laval Ouest, Saint-Mathias-sur-Richelieu, Saint-Hubert
RBC Financial Predictions – 2019
RBC’s outlook for home prices in Canada predicts a a very modest rise of 1.8% by the end of 2018 with a slower 0.2% gain in 2019.
Their views on prices haven’t really changed since their May forecast despite resale activity coming in weaker than we expected so far in 2018. RBC projects a steeper drop of 11.5% to 456,700 units in late 2018 instead of the 4.3% decline to 493,900 units we projected in May. Ontario and British Columbia will account for most of this drop.
The new stress test on uninsured mortgages will have larger, longer-lasting dampening effect on resales than we previously assumed. This effect will taper off over time with the market’s still-positive fundamentals—an economy running at capacity, low unemployment rates, rising incomes and rapid population growth—providing scope for a slight 1.6% increase in resales in 2019.
Specifically in Quebec, the real estate market has shown some resilience this year thanks to a strong economy. Yet we expect the stress test and rising interest rates will cause resales growth to slow from 5.8% in 2017 to 1.6% this year, and prices to decelerate from 3.8% to 3.0%. The Montreal market remains on an impressive upswing.
Royal LaPage CanadianHome Price Survey – 2019
According to a market survey by real estate company Royal LePage, Canadian home prices are expected to appreciate at a low rate in 2019. The average single family home is forecast to rise by 1.2% to a price of $638,257. In the Greater Toronto Area, prices should make modest gains of around 1.3% to $854,552. In Greater Vancouver, the average home appreciation rate is forecast at 0.6% to $1,291,144.
Meanwhile, median prices in the Greater Montreal Area are expected to see the largest gains, rising by 3% cent to $421,306.
Cue to its low unemployment rate and renewed confidence in trade south of the border with the new Canada-United States-Mexico Agreement, the Greater Montreal Area real estate market is projected to outperform Canada’s major cities when it comes to real estate growth.
OSFI Mortgage Interest Interest Rate Predictions – 2019
“By the end of 2020, a majority of economists expect at least three more rate increases to 2.5%. Scotiabank expects the bank rate may reach 3.00% in 2020. Overall, with a replacement for the NAFTA trade agreement negotiated, banks have accelerated their expected rate increases. The Bank Rate was 4.00% in 2007 so the forecast rates are not outside the normal range long term range.”
An increase in Bank Rate will pull the Prime Rate up alongside it, so variable and adjustable mortgage rates could possibly rise 0.75% to 1.25% by the end of 2020. If upcoming borrowers are worried by this, they should consider a fixed rate mortgage.
Desjardins and National Bank are both predicting a sharp downturn in interest rates toward the end 2020, which would be an appropriate response to a recession.”In our previous forecast RBC showed a similar downward prediction but subsequently they’ve adjusted their forecast upward. Fears of a recession are nothing new and a recent Huffington Post article covered this exact topic. In truth, a recession is likely inevitable but the timing is devilishly tricky.”
Based on these forecasts, locking in today’s 3.7% 5-year mortgage rate will start benefiting borrowers in 2020 if variable rates climb to 3.90%.
Those inclined toward a fixed rate mortgage should speak to a Mortgage Broker as early as possible to lock in a rate.
This article, Montreal Real Estate Market Trends and Predictions – 2019, appeared first on Shupilov News