An economic revival in Canada’s second-biggest city is fueling a real-estate renaissance, speeding up sales, shrinking inventories, and luring foreign buyers. More stringent lending rules have curbed transactions and slowed price growth in Toronto but have had little effect on Montreal, where buyers are flocking to new condos and sellers are gaining the upper hand.
The trend continued in April, as home sales rose 10 per cent from a year earlier. By contrast, Toronto posted its weakest sales for the month in 15 years, while activity in Vancouver fell 27 per cent, even as prices in both markets were stable.
Montreal’s rebirth is showing in ways big and small. Devimco Immobilier Inc., a developer that sold a record 1,180 condos downtown last year, is moving up two towers because of high demand, with calls coming in from as far away as China, special adviser Marco Fontaine said in a phone interview. Montreal, long the “neglected child” at Canadian real-estate conferences, is now a topic of discussion, he said.
“There’s an incredible buzz,” Fontaine said in a phone interview. “We’re much cheaper than Toronto and Vancouver and that’s attracting a lot of interest.”
The biggest drive is economics. According to think tank Institut du Quebec, Montreal added more jobs in 2016-17 than in the previous eight years, with companies including Amazon.com Inc. and International Business Machines Corp. opening new data and tech centers. The city, where both French and English can be heard on the street, is also growing into an artificial intelligence hub that’s home to Thales SA and Facebook Inc. research labs.
Analysts don’t see signs of overheating yet. Houses in the city, which is known for a vibrant food and cultural scene and universities such as McGill and Universite de Montreal, are still a bargain compared with the country’s most expensive markets. At $317,000, the median detached house price for the greater Montreal region compares with $870,000 in Toronto and $1.4 million in Vancouver, according to the local real estate boards.
Still, the number of properties that sold for more than $1 million grew 20 per cent last year according to Sotheby’s International Realty, which expects Montreal to lead major cities in the luxury market segment this spring. Growth for both benchmark prices and the number of transactions in the resale market has outpaced Toronto’s this year. And pressure on prices — which rose 7 per cent for houses and 3 per cent for condos last year — is set to creep up, the Canada Mortgage & Housing Corp. said in a report last week.
“Demand is strong and the number of properties for resale is down, so market conditions are getting tighter,” CMHC analyst Francis Cortellino said in a phone interview. “The Montreal market is very dynamic at the moment.”
Daniel Cholewa, who as chief executive officer of Keller Williams Urbain in downtown Montreal oversees a network of more than 100 brokers, says transactions in the first quarter were up 45 per cent from a year ago, the best market he’s seen since entering the business a decade ago. Stories of bidding wars and 48-hour sales are becoming more frequent, he said.
“The market has been so stagnant and has been such a buyers’ market for so long here that growth is natural and it’s necessary,” he said in a phone interview. “The fact that this has been happening is a really good thing.”
Source: BNN Bloomberg