Montreal’s real estate market is creeping towards overheated levels, according to the latest CMHC (Canadian Housing Market Assessment ) report.
Vulnerability in a housing market is generally assessed using 4 factors: overheating, price acceleration (also known as “price growth acceleration”), overvaluation and overbuilding.
The latest HMA results are based on data from the first quarter of 2018 and market intelligence as of the end of June 2018.
In Montreal, house prices have continued to grow rapidly in certain neighbourhoods.-The average single family home costs $445,000 on the Island of Montreal.
Should rapid price growth continue, it could trigger the price growth acceleration alert in the next HMA report.
That being said, Montreal still faces a low relative degree of vulnerability to market instability when compared to other Canadian metropolitan cities.
- The seasonally adjusted sales-to-new listings ratio fell just below 69% in the first quarter of 2018.The threshold for overheating is a sales-to-new listings ratio is 70%
- This is the seventh consecutive quarter in which the sales-to-new listings ratio has risen.
- The active listings-to-sales ratio for single-family homes has decreased, giving sellers the advantage when it comes to negotiations.
- West Island, Sud-Ouest, Notre-Dame-de-Grâce, Île-des-Soeurs have been experiencing the highest signs of overheating.
On the city of Montreal conditions are more favourable to sellers, even in the condo market where supply has hit a record, 8 year low.
According to the CMHC, price increases have been in line with population and economic growth.
“Even though prices increased, they did so in a context of strengthening fundamentals,” the report reads.
There is no strong evidence of overbuilding, according to the CMHC.
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