Where is Montreal’s real estate market headed in 2018? Here’s what we know so far, based on industry reports and statistics.
Canadian Real Estate Outlook – CREA
The Canadian Real Estate Association has released its 2018 outlook on market trends. It sees home sales dropping nationally as a due to slower activity in Vancouver and Toronto. Cooling markets in those cities are expected to result in a 2.3% drop in houses sold next year. The decline comes mostly from Ontario, where homes sold will drop by 5.9% in 2018. Since the region houses a quarter of the Canadian population, a change in sales activity will have a large impact on the national results.
In Quebec, average prices are expected to rise by 3.2% in 2018, and sales will also continue on an upward trend.
Emerging Trends in Canadian Real Estate – PWC
According to PWC’s report on real estate trends, condominiums are poised for success in 2018. Single family homes are also expected to yield modest growth. In Montreal, multi-purpose condo projects and rental projects are seeing success, 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.
Montreal’s economy is expected to grow by 1.9% in 2018. The city is viewed optimistically by real estate investors as a promising and affordable market. PWC’s survey respondents rank Montreal the No. 3 market to watch in Canada for investment prospects, after Vancouver and Toronto.
Montreal Real Estate Outlook – GMREB
The Greater Montreal Real Estate Board (GMREB) sees Montreal as a re-emerging force in Canadian real estate, this upcoming year. The metropolis recorded a 15% increase in sales this year, compared to 2016. Prices on detached homes have increased by 6% year over year, and the real estate’s board has forecasted a continued growth of 6% in 2018. The city is increasingly attractive to oversea buyers, attracting investors from Europe (mostly 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, and relative affordability in Montreal.
The Greater Montreal Real Estate Board also published rising property values in Montreal – the average selling price rose to just over $374,000 (a 4.2% year over year increase) in August 2017). Single family home prices increased by 3%, condo prices increased by 1% and plexes increased by 4%.
Mortgage and Interest Rate Outlook – OSFI
The stress-test implemented as part of OSFI’s new mortgage regulations is intended to cool down Toronto and Vancouver’s overheated markets. However, these changes will also impact homebuyers in Montreal. Borrowers must now qualify against to Bank of Canada benchmark rate, or their pre-approved rate + 2% (whichever is higher), reducing borrowing capacity by a minimum of 18.5%. The effects of these changes is yet to be seen, with some analysts predicting a drop in house prices, and others reporting that many first time buyers may need to lower their budgets or delay homeownership.
All in all, there is a lot to look forward in the upcoming year!