Montreal’s real estate cycle is currently in the expansion phase, where new construction begins to pick up due to a strong economy and low unemployment rates. Demand outweighs supply, prices are high (and rising,) and competition may lead to bidding wars.
With prices on the rise, should investors and first time buyers consider a single family home purchase in 2019?
Here are some points to consider:
What do average appreciation rates and prices look like?
The average Montreal single family home cost $475,000 in 2018. It appreciated by 8% annually.
Single family homes have appreciated in price across all boroughs on Montreal Island with the exception of Verdun / Nun’s Island, according to the latest (Q3) Centris statistics.
The highest appreciation rates were recorded in Ville Marie, (Downtown and Old Montreal)where the average single family home appreciated by 33% year over year in Town of Mont-Royal, and costs $944,500
All statistics are based on Centris data for the third quarter of 2018.
|Average Price||Appreciation Rate (Annual)|
|Villeray / Park Ex/ St Michel||$410,000||15%|
|CDN \ NDG||$818,000||15%|
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Investment strategies during the expansion phase:
During the expansion phase, investors and developers can comfortably acquire new rental investment properties without much risk, since tenant retention is high and rents are rising.
Most investors choose to acquire “Core-Plus” properties during this period – investments with less risk than value added properties, at a lower leverage range or 20% to 30%.
This is a good time to secure neglected properties in need of renovation, and bring these properties into full productivity before reselling them at the crest of the cycle.
For developers, the expansion period is the ideal time to develop new projects, as current demand for space is at a market high.
Where to find homes below market value:
To secure a good deal amidst growing real estate prices, investors can try the following strategies:
- Set up a property alert for repossessions in your preferred neighbourhood. Repossessed homes tend to be listed below market value since they are being sold by the bank, rather than the seller. Note: indicate that you are looking for repossessed properties in the “Additional Criteria” section.
- Request a list of top properties listed below municipal evaluation in Montreal.
- If you think a property might be listed below market value, request a free professional evaluation of the property’s current worth.
- Ask your broker to send you his or her own selection of BMV properties. Many brokers have access to pre-market BMV properties, which are likely to sell even before they are listed online.
- Subscribe to a Deal of the Week mailing list, which will send you the single best BMV property on the market every week by email.
Most affordable Montreal boroughs to find single family home deals in 2019:
Boroughs with highest appreciation rates for single family homes:
- Villeray (33%)
- Cote des Neiges / Notre Dame Des Graces (15)
- Villeray / Park Ex/ St Michel (15%)
- South West (14%)
This article, Montreal Real Estate Forecast: Should I Buy A Single Family Home In 2019?, appeared first on Shupilov News.