Montreal Home Prices Are Rapidly Increasing & Many Millennials Can't Imagine Ever Buying
46% of Millennials think home-ownership is a "pipe dream."
- Reports indicate that Montreal real estate prices continued to increase at the end of 2019.
- This news comes as a new survey shows that 46% of Millennials have just about given up on the dream of owning a home.
Montreal real estate prices continued to climb at the end of 2019, with a 6% increase in the median price of a single-detached home from last year, according to Mortgage Broker News. Condo prices also continue their upward trajectory, showing a 9% increase in the median year-over-year price and multifamily dwellings displaying a shocking 11% increase when compared to prices seen this time last year. These rising prices come in conjunction with the "50th straight month" of falling supply in the region, according to the Quebec Professional Association of Real Estate Brokers.
In fact, Mortgage Broker News reported just last week that Montreal's real estate market was to be tested in the coming months and years due to demographic changes that could stand to severely alter the market for potential buyers and sellers, alike.
These demographic changes, as outlined by MBN in the article linked above, include an ageing population and slower growth in "household formations."
Residential construction could slow down in the next couple of years, creating a "gap between net household formations and residential construction starts."
With that said, MBN also notes that even if the "total new-home construction is forecast to slow," as current homeowners age and sell, opting for condos or retirement facilities, the renovation industry could see a boom.
The increase in the median price of homes is generally good news for current homeowners or people looking to purchase now.
However, it comes as more discouraging news to millennials who are still hoping they may one day have the ability to purchase a home.
A recent survey done by KPMG Canada indicates that millennials view owning a home as a "pipe dream," as soaring house prices and rising personal debt make it increasingly difficult to save for a mortgage.
The survey notes that it now takes "an average of 13 years to save for a 20% down payment," compared to the five years it took our parents in 1976.
The survey spoke with 2,500 Canadians including 1,000 millennials between the ages of 23 and 38 (a demographic that, KPMG notes, is now the largest population in the country).
The survey discovered that while 72% of Millennials have home-ownership as a goal in life, nearly 46% believe that goal is also a pipe dream.
Of those millennials surveyed who did own a home, 46% admitted that they had help from their parents in order to make the purchases.
Here in Montreal, 4,084 homes were sold last month, marking a 13% increase in sales activity compared to the same time last year.
However, at the same time, the number of for-sale homes in the Montreal CMA's Centris system "was 22% lower compared to the same month last year," MBN explains.
In speaking with the president and chief executive of Quebec Professional Association of Real Estate Brokers, Julie Saucier, MBN reported that this drop in the number of homes for sale, as well as the 18% increase in condo prices on the Island of Montreal from November of last year to this year, have broken a 17-year record.
It is clear that, while Montreal has often been seen as the affordable sister to Toronto and Vancouver, that reputation may not last long.
With prices continuing to rise and a maturing population whose selling behaviour is yet to be seen, who knows how long this Montreal real estate hot streak will continue before the bubble bursts?