Despite a decline in sales of holiday property overall in Canada, there has been an increase in demand in Quebec’s cottage country. Quebec’s strong economy is attracting buyers based in Canadian cities with higher property prices. Its relatively affordable but still luxurious properties are also encouraging investment from international buyers. Even with continued price growth and upward momentum in Greater Montreal’s real estate market, the sale of family homes, luxury properties and industrial real estate is steadily increasing.
An Increase in Purchasing Power
The enduring affordability of properties in Montreal is further enhanced by the recent drop in the mortgage qualifying rate. After increasing several times during 2017 and 2018, the interest rate for Canada’s mortgage stress test has fallen for the first time since the test was introduced in 2016. The rate has dropped by almost 3%, a significant amount which will have a positive impact on the purchasing power of home buyers. Of course, buying a property is still one of life’s most expensive outgoings. However, even just a small drop in interest, combined with an appropriate mortgage, could save buyers a significant amount of money.
A Rise in Luxury Real Estate Sales
The market for luxury real estate is thriving in Montreal, and already 11 properties valued at over $4 million have been sold this year, compared to just 3 in the first half of 2018. International buyers looking at purchasing property in Canada have been deterred by the foreign buyers’ taxes imposed in Vancouver and Toronto. Rather than pay an extra 20% on the purchase of residential property, foreigners and foreign nationals are looking at more affordable luxury properties in Montreal.
Growing Demand for Industrial Space
In contrast, the industrial real estate is experiencing a record low in sales. However, this is due to a growth in demand rather than a sluggish market. An increasing number of local retail businesses and entrepreneurs are expanding, and this has contributed to a 50% drop in the availability of industrial real estate in Montreal over the past two years. In addition, Montreal has also seen a spillover of growing companies from other major Canadian cities where space is already in short supply. This shortage will likely result in a rise in rents and land value.
Without the need to compromise on a luxury lifestyle, Quebec’s comparatively affordable property makes it more attractive to both local and international investors. This popularity has contributed to a short supply of industrial real estate, and for all types of property, prices are starting to rise. However, Montreal still remains affordable and, with the right mortgage and lower interest rates, buying a property here is a little less challenging.