Why You'll Never Be Able To Afford A Home In Montreal
Montreal’s real estate market is still going strong, and if home sales keep up to the same pace, owning property in Montreal will become increasingly difficult (or next to impossible) for a large number of Montrealers.
August was a record-breaking month for real estate, with more property sales occurring last month than any August before it, according to the Greater Montreal Real Estate Board.
Housing sales rose by 8%, with 2,899 transactions made.
A large number of property sales in August 2017 were for condos, accounting for about 19% of total sales.
Condos are generally cheaper than a standard, single-family home, so it makes sense that Montrealers are opting for the cheaper option. The fact that there’s more condo inventory nowadays probably doesn’t hurt.
But while condos are an affordable option for prospective property owners in Montreal, that might not always be the case.
Over the last 30 months, real estate sales in Montreal have steadily increased. February 2015 was the last time Montreal saw a decrease in property transactions, notes CTV News.
And when sales increase, so do prices. That’s what increased competition does to a real estate market.
Just look at Toronto, where housing prices skyrocketed due to intense competition between buyers.
Now Toronto is experiencing a downturn in sales (a drop between 25%-40%) which has resulted in a slightly less expensive market.
Montreal is still far more affordable than Toronto, mind you. The median price for a home in Montreal is set at about $325,000, whereas Toronto’s average is upwards of $700,000.
But Montreal’s prices are increasing. Montreal’s average home price went up by about 4.1% last month.
Eventually, if home prices keep going up, a lot of Montrealers may be priced out of the market.
That becomes an even greater possibility when you consider how home-sales for properties over $500,000 actually went down in Montreal and the major surge in condo sales.
Montrealers are buying cheaper housing units and, eventually, that inventory will dry up, leading to higher prices for those that are still available.
Foreign buyers may also influence Montreal’s real estate market. Well, more so than they already are.
Real estate agent David Mellor spoke to the Thompson Citizen and said how Chinese buyers are increasingly snatching up property in Montreal. Over the last year-and-a-half, Chinese buyers have been purchasing more and more homes in Montreal, particularly in the west end of the city.
According to Mellor, some of these foreign buyers are purchasing three or four homes, living in one then renting out the others. And more foreign buyers are likely to do the same.
Foreign buyers aren’t anything new to Canadian real estate (just look at the “foreign buyers tax” implemented in Ontario and B.C.) but foreign buyers do tend to have the same impact on a city’s housing market: they drive up prices.
Again, it’s the whole “competition increases prices” thing. With more foreign buyers coming into Montreal and buying up property, multiple properties in some cases, then there’s less inventory for Montrealers.
Less housing inventory with a higher number of prospective buyers results in a really hot housing market where prices will soar.
So if you’re one of the many Montrealers quietly saving up enough to purchase some property, you may be out of luck in a few years time when the market gets too hot for you to handle.
But if you’re one of the many other Montrealers who’s totally okay with renting forever, then carry on and sorry to bother you.