Montreal recorded its first housing sales increase in five years last year, but Canada’s Toronto and Vancouver cities continued to display their might when it comes to matters of real estate development, with both cities experiencing a housing sales rate of 9.8% and 18.9% respectively.
The Quebec Federation of Real Estate Boards, which was the body that announced the news recently, noted that housing sales in Montreal were pretty much expected to grow at a similar rate in 2016. The growth rate in Canada’s second largest city comes amid low interest rates in houses and mortgages throughout the city. However, QFREB says that the fact that Montreal experienced a slightly better job market was one reason why housing sales rates in the city improved despite Canada’s economic recession in the first six months of 2015.
Paul Cardinal, a market analysis manager in QFREB stated that the low increase of residential real estate markets was most likely to reoccur in 2016, especially during “the spring period, which is the most active time of the year for buying a property.” In addition to this, Montreal experienced a 3% growth rate in its housing area pricing, which saw the average buying price for a home rise to $295,000. The pricing was still low however when compared to the buying prices in both Toronto and Vancouver.
In 2016, the house prices for a single family unit are expected to rise albeit at a low rate of 2%. The low percent growth rate in the housing area might also have been due to the city’s influx in apartment houses, which by far are the main living options for average families in Montreal. Relative to this, the projected growth rate of apartment houses in Montreal are not expected to grow at a rate higher than 1% throughout 2016.
Paul Cardinal of QFREB has some good news about real estate investors however. According to him, the heavily exploited condominium market is likely to experience a drop of up to 25% in 2016, which would give the much needed relief for investors wishing to venture into other sectors of the real estate industry. He also notes that Montreal lacks the huge number of investors who have crowded cities like Vancouver and Toronto in recent the years.
The low state of the Canadian dollar at the moment according to Cardinal might be a great leverage for foreigners wishing to exploit Montreal’s real estates in 2016 and beyond. However, most analysts are skeptical about the Canada’s real estate growth rate during this year, with most of them predicting a growth rate of less than 5% in the big three cities. One of the analysts, Robert Hogue even exclaimed that “if there was a market correction, banks could become very cold.” The pessimism here is driven by U.S.’ unfavorable import terms especially putting into consideration the Canadian dollar’s poor value in recent times. The same predictions might however favor Montreal’s export driven economy according to market analysts.