A new Sotheby’s report on the Canadian luxury real estate sector names Montreal and Calgary as the fastest growing markets for homes over $1 million. This puts Montreal in a position to eclipse Toronto and Vancouver, where government policy interventions have cooled down residential real estate sales.
Luxury sales in Montreal have jumped 20% over the past two months (January and February 2018), with total luxury sales amounting to 104 units. Sotheby’s CEO Brad Henderson attributes the spike in activity to infrastructural developments within the city, along with high consumer confidence and economic growth.
“Montreal has been Canada’s ‘dark horse’ in luxury real estate. For many years, political uncertainty and a stagnant economy tethered performance, but those factors have now dissipated. This spring, we expect strong gains that will set new records for the city.”
An increase in the immigration quota has also contributed to a growing amount of French expats and international students investing in the city: “Next to Toronto, Montreal is largest recipient of the 300-something-thousand individuals who come to Canada every year. Net growth translates into demand for real estate, and prices in Montreal, compared to Toronto and Vancouver, are a bargain.”
The city has recently undertaken large infrastructural projects such as an REM train network, the new Champlain bridge, and a “Hyperloop” train linking Montreal with Toronto. A faster and wider transportation network will allow the city to grow its labour force and reduce the commute time for residents living outside the city core.
“The lack of investment in our roads and public transit has cost the city dearly in terms of productivity,” says Henderson. “Consumers are deadlocked in their ability to buy and move – their diminishing willingness to transact is slowing activity”
Montreal’s $6.383 billion budget for 2018 – 2020 puts a strong focus on infrastructural development. This along with new luxury projects in the city and affordable costs are expected to drive record performance in 2018.
Key points regarding Montreal’s Luxury Market:
- Residential real estate sales over $1 million rose 20% year-over-year
- 734 units were sold in January and February
- Montreal’s luxury real estate market is poised to lead Canada’s metropolitan centres in spring 2018
- Strong economic and political fundamentals increase consumer confidence and drive demand
- Sales of luxury condominiums rose by 33% to 16 units
- Sale of luxury homes have increased in demand and decreased in supply, reducing time on market and elevating prices. This shortage of supply also limited sales of detached homes over $1 million in 2017.
Calgary is also expected to see an uptick in its luxury market as the province’s as growth GDP exceeds expectations and growing manufacturing exports improve consumer confidence. Real estate sales over $1 million rose 45%, cumulating in 94 units sold in January and February.
Meanwhile, both Vancouver and Toronto posted significant declines in their luxury markets, following a package of market-cooling measures including a new stress test, rent control and a 15-20% foreign buyer’s tax.
In Toronto, luxury sales decreased by 55% in January and February, to 1,498 units. Condos worth over $1 million also decreased by 2%.
In Vancouver, sales over $1 million tumbled by 39%, to 198 units. However, transactions of condos over $1 million increased by 51%.
This article, Montreal to Lead Canadian Luxury Real Estate Market: Spring 2018, appeared first on Shupilov News.