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MONTRÉAL’S PORTION IN NATIONAL FORECAST
The Montréal market is booming, with the local real estate board indicating bidding wars occurring in record numbers in 2019. It is a growing sellers market, fueled by a potent mix of heritage properties, creative industries and an emerging tech economy. Large investments by global corporations in downtown Montréal, as well as an influx of start-ups are fueling the price surge. There is a consistent demand and attractiveness to live in the city with days on market shortening due to many properties selling above asking. Engel & Völkers expects this to continue in 2020 with neighbourhoods like Mile End and Mile-Ex emerging as thriving areas to live and invest in, drawing interest from business professionals, creatives and tech talent. Engel & Völkers anticipates annual growth in Montréal from 4 to 7 per cent in 2020, seeing it hold its position as one of Canada’s hottest housing markets for luxury real estate.
MONTRÉAL’S INDIVIDUAL MARKET SECTION
Montréal consistently remains one of the top luxury housing markets in Canada. For the fourth consecutive year, the average single family resale house price in Montréal increased 7 per cent in 2019, condominiums increased by 14 per cent and plexes (2 – 5 units) increased by 14 per cent year-over-year. By the end of December 2019, total residential sales reached 3,533, increasing by 26 per cent compared to December 2018. 2019 proved once again to be a seller’s market, with much of the inventory receiving multiple offers, according to Engel & Völkers Montréal. This was the first year the city experienced consistent multiple offers on properties, with many receiving 10 or more. The Quebec Professional Association of Real Estate Brokers (QPAREB) reported 35 per cent of all real estate transactions through September 2019 in Rosemont-La Petite-Patrie resulted in selling prices exceeding asking prices. That is the highest proportion among Montréal Island neighbourhoods.
An In-Depth Look
Montréal’s most in-demand luxury markets continue to be Plateau Mont Royal, Outremont, Westmount, Montreal West, Town of Mont-Royal and the West Island, with reports of homes trading for above $1 million over the past two years. Single family units remain the most popular among affluent buyers, with few available vacant lots and strict planning guidelines for new builds, including height restrictions.
According to data released by QPAREB, all six main areas of Montréal’s CMA registered significant sales increases in December, including North Shore (35 per cent increase), South Shore (31 per cent increase), Laval (27 per cent increase), Island of Montréal (21 per cent increase), Vaudreuil-Soulanges (20 per cent increase) and Saint-Jean-sur-Richelieu (19 per cent increase).
The median price of single family homes stood at $355,000 in December, up 9 per cent compared to one year earlier. The median price of condominiums stood at $285,000, a sustained increase of 5 per cent compared to December of 2018. The median price of plexes jumped by 11 per cent year-over-year, reaching $581,000.
The investor market has picked up in Montréal, especially with data from Rentals.ca showing average rents in some areas of the city growing by over 20 per cent annually. Newcomer and foreign investor interest is growing, with the largest international buyer group coming from French-speaking Europe and North Africa, including France, Algeria, Lebanon, Morocco, and Egypt. A growing investor group is coming from China, the most affluent of which are buying hotels, while others are concentrating on downtown new construction. When the foreign buyers tax was introduced in Toronto, inquiries on Juwai.com, a website featuring international properties to an audience of high net worth Chinese buyers, grew by 85 per cent in 2017.
Montréal consistently ranks as the best city in the world for students on the QS Best Student Cities ranking list with top-tier universities like Université de Montréal and McGill University – and 2019 saw it earn this position once again. The QS Best Student Cities ranking considers factors such as the quality of a city’s universities, its student population, accessibility for international students, safety, affordability, employment opportunities and a survey of students from around the world. With this, Montréal is seeing a rising trend of international students moving into the city for post-secondary education and long-term residency.
A neighbourhood to watch is Mile-Ex, an industrial area attracting architects and creatives who are converting spaces into residential lofts and businesses. Mile-Ex sits next door to Mile End, a destination for food, art and galleries. Mile-Ex is the emerging tech hub of Montréal, with multinational corporations like IBM, Facebook, Google, and Samsung expanding operations in this area. The Montréal Institute for Learning Algorithms is opening a new facility supporting 700 workers here as well. Both Mile End and Mile-Ex are important economic drivers in Montréal. These multi-faceted communities have a rich history as an immigrant corridor and are known for affordability and a wide-range of positive cash flow duplexes. Other up-and-coming markets for investors are Little Italy and Villeray. Overall, Engel & Völkers Montreal is also seeing the South Shore, North Shore, Eastern Townships, Tremblant and Québec City growing as strong luxury markets in the province.
Engel & Völkers cited its average sale price in 2019 in Montréal was $761,000, with
155 current listings over $1 million entering 2020. In 2019, it closed 206 deals priced over $1 million.
“Montréal benefited greatly from the lack of a foreign buyers tax – more so after Toronto’s went into effect. In 2019, it seemed like all eyes were on Montréal when looking to buy, and we’re seeing strong interest from French speaking countries in Europe and North Africa as well as China. Our growing employment market, quality of life, strong affordability and top-ranked schools make Montréal one of the best cities to live in, globally.”
- Patrice Groleau, License Partner at Engel & Völkers Montreal
Engel & Völkers projects annual growth from 4 to 7 per cent in 2020. The market is projected to continue being a strong seller’s market, attracting demand both domestically and internationally. Shorter selling times for all property types reflect this position in favour of sellers. Single family homes were down by 15 per cent to 61 days and condominiums were down by 17 per cent to 76 days. It is clear Montréal benefited greatly from the lack of a foreign buyers tax, and overall consumer confidence remains high. There is a consistent demand and attraction for living in the city, evident by the reduced days on the market and many properties selling above asking.