Photo: Hubert Figuiere/Flickr
By all accounts, 2018 will be a slower year for the Canadian housing market, as rising interest rates and new mortgage rules dampen the market. But while the rest of the country is cooling down, there’s one market that looks to be heating up.
“Residential sales in 2018 will increase more significantly in the Montréal metropolitan area,” reads a recent report from the Quebec Federation of Real Estate Boards. “In 2018 we expect the increase to be in the order of 5 per cent.”
There was a record breaking number of sales in the city in 2017, a trend which should continue into the new year, according to QFREB market analysis department manager Paul Cardinal.
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“For the first time in history we should surpass 45,000 sales in the city [in 2018],” writes Cardinal, in a statement. “The condominium segment should be particularly strong.”
QFREB forecasts that, along with a jump in sales, the average price of a home will spike 5 per cent to $332,000 for a single-family home, and 3 per cent to $255,000 for a condo.
“In terms of prices, growth will be stronger in Montréal [than in the rest of the province]…as it currently has the tightest market conditions,” reads the report. “It is a seller’s market for single-family homes and [multi]plexes, while conditions are more balanced for condominiums. The result is more upward pressure on prices and faster selling times.”
In addition to tight market conditions, the city has seen a surge in job growth, adding 115,000 jobs in the last two years.
“It is also important to point out that the vast majority of immigrants to Québec chose to settle in the Montréal area, which creates new housing needs, a phenomenon that should continue this year,” reads the report.
The strength of the city’s sales stands in stark contrast to declining sales in typically red-hot markets. In 2017, Toronto saw a sales decline of 18 per cent, while Vancouver sales plunged 10 per cent.
It’s worth noting that, unlike Toronto and Vancouver, Montreal is without a foreign buyer tax. While the psychological impacts of the tax appear to be fading in both cities, they saw sales and prices drop after it was first introduced.
As for the new mortgage rules which came into effect on January 1, which are widely expected to dampen the Canadian housing market, Montreal may benefit from an asset it shares with smaller cities like Ottawa — a low price point.
“One factor that will soften the blow of the new mortgage rules is Ottawa’s average price point which is in the $400,000s,” Ottawa Real Estate Board president Ralph Shaw told BuzzBuzzNews.
With Montreal’s price point in the $300,000s, it may fare better against the new rules than some of Canada’s pricier markets.