Sales of homes priced at $4 million and higher nearly doubled in 2021.
As rent prices continue to climb in Montreal, so do the number of ultra-expensive homes being purchased by the city's wealthiest buyers. A new report analyzing the luxury real estate market in 2021 shows a major increase in Montreal homes and condos sold for $1 million or more.
Engel & Volkers' 2021 Year-End Canadian Luxury Real Estate Market Report focuses on "Canada's most in-demand cities," which it identifies as Halifax, Ottawa, Toronto, Vancouver and Montreal.
According to the report, the number of Montreal units sold that were priced between $1 million and $3.9 million shot up 150% compared to 2019. Condo sales in the same price range grew by 87% year-over-year in December, says Engel & Volkers in a press release.
For single-family homes priced at $4 million and higher, Engel & Volkers says total home sales "nearly doubled compared to the previous year," rising by 75% since 2020.
Why are there more expensive homes for sale?
Engel & Volkers attributes Canada's surging luxury real estate prices to a combination of low interest rates, limited supply and increased demand from buyers who are "leveraging their current homes to trade up."
In Montreal, specifically, "the number of premium homes in top neighbourhoods is limited" — something that has only been exacerbated by the pandemic.
"Historically, supply has come to the Montréal market from seniors downsizing and making housing units available to young families and first-time buyers. The pandemic has created a behaviour change, where aging seniors do not want to downsize or move into assisted living facilities, especially in light of the status of Montréal’s long-term care homes during the pandemic," says Engel & Volkers.
Real estate broker Patrice Groleau says that, even while borders are closed, there's still consistent international interest in the Montreal real estate market contributing to demand, particularly from French-speaking buyers including those in Belgium, France, Switzerland, Morocco, Tunisia and the Ivory Coast.
"These buyers are interested in Montréal and are viewing properties remotely, with some even purchasing site unseen," he says in the report. "Price gains for both premium and conventional real estate will continue, especially once immigration returns to pre-pandemic levels."
The Bank of Canada plans to keep interest rates low through mid-2022. Engel & Volkers predicts that "if supply does not replenish, prices will continue to climb in 2022."
Engel & Volkers also estimates that more than 80% of luxury home sellers in Canada in 2022 will be Gen Xers and millennials.
This article’s cover image was used for illustrative purposes only.