Montreal Real Estate – Survey released today shows that the Greater Montreal real estate market is continuing to pick up speed, despite expectations of a slowdown in price appreciation halfway through the year. In the second quarter of 2019 (and for the fourth consecutive quarter), the Greater Montreal Area experienced a higher home price appreciation rate than both the Greater Toronto Area and Greater Vancouver, seeing a 5.8% increase in the aggregate price1of a home, reaching $410,828.
“For several quarters now, the Greater Montreal real estate market has been outperforming Toronto and Vancouver in terms of price growth, but the data needs to be put into perspective as homes here remain far more affordable,” says Dominic St-Pierre, Royal LePage vice president and general manager for the Quebec region. “If we applied Montreal’s current appreciation rate, it would take 13 years for Montreal to catch up with Toronto, and 19 years to catch up with Vancouver,” he says.
Maintaining the momentum of the previous quarter, two-storey homes continued to be the housing type most in demand, due to weak inventory, with their median price rising 6.1% year-over-year to $516,820. During the same period, the median price of a bungalow increased 5.7% year-over-year to $325,730. Condominiums also experienced a steady 5.1% increase, bringing the median price to $331,721.
“Looking at the Montreal market’s current rapid and sustained appreciation compared to other domestic markets, it would be tempting to make comparisons to the price spikes that hit Vancouver three years ago, and then Toronto,” says St-Pierre. “However, the appreciation rates experienced by these two cities increased by more than 25%, which is far from being the case in Montreal.”
Greater Vancouver first experienced a spike of 27.3% year-over-year appreciation of its aggregate in the second quarter of 2016. Greater Toronto’s appreciation peaked at 25.3% in the second quarter of 2017. For the past three years, Greater Montreal saw far less significant appreciation rates, ranging from year-over-year increases of 3.4% to 6.1% for all property types combined.
Effect of foreign buyers noticeable for first time
In Montreal, the most recent data indicate that the share of foreign buyers in the region increased from a marginal ratio of less than 2 % a few years ago to 3.4% in 20182. Royal LePage’s experts also note that interest from these buyers now extends beyond the central areas of the island (neighbourhoods that used to be their main target).
Significant price appreciation in Montreal east and centre
Montreal East home prices recorded the highest aggregate appreciation rate this quarter (8.3%), followed by Montreal Centre (8.2%). The price of a two-storey home increased the most in Montreal Centre and Montreal East rising 10.8% and 10.4% year-over-year, respectively. Conversely, the price of a two-storey home in Montreal West fell by 1.6%, resulting in a slight correction that stabilized prices. During the same period, the median price of a bungalow had the greatest appreciation in the West, with a 12.3% price increase year-over-year. The price of a condominium increased most in Montreal East, rising 6.4% year-over-year, followed by the South Shore where the median price rose 5.6% during the same period.