3 unexpected ways Montreal’s housing market continues to heat up
Strong immigration numbers and a red hot job market have been boosting the Montreal housing market all year, and last quarter was no exception.
As other cities struggle to adjust to the effects of new policy, including a mortgage stress test, the Montreal market has posted month-after-month of rising home sales and prices.
Read on for a closer look at three ways the market continued to outperform last quarter.
Sales are climbing
The second quarter of 2018 saw a 4 per cent quarter-over-quarter sales increase, according to the latest data release from the Greater Montréal Real Estate Board (GMREB).
The sales bump was led by condos, which remain the market’s most in demand property type.
“Condominiums remained the most dynamic property category with a 13 per cent jump (5,120) in the number of transactions, while multiplexes (1,332) registered a modest increase of 1 per cent,” reads GMREB’s latest release.
While listings plummet
As sales rise, listings are falling, tightening the market and pushing prices upwards.
Just over 24,000 properties were listed last quarter, the lowest level since 2010, a 17 per cent year-over-year drop and the 11th consecutive quarterly drop.
“Residential sales in the Montréal CMA have been increasing for four years now,” writes GMREB Board of Directors president Mathieu Cousineau, in a statement. “This sustained pace of sales, combined with the steady decline in the number of properties for sale, gives sellers an increasingly advantageous position in negotiations.”
The median price of a condo grew by 3 per cent last quarter, and now sits at $322,509.
Its industrial market is booming
As the city’s residential market continues to heat up, there’s an increasing demand for its industrial property.
“Montreal’s industrial real estate market, which stagnated for many years, is experiencing a genuine boom,” write Desjardins economists François Dupuis and Hélène Bégin, in a recent note.
The pair write that, while demand is high, supply is limited by high cost and scarcity of land.
“Net rents in the Montreal metropolitan area, which were stable for many years at around $5 per square foot, are now edging closer to $6 per square foot, improving profitability for landlords,” they write. “The buildings for sale are sparking the interest of local and foreign investors, increasing the frequency of multiple purchase offers. This has driven up prices for industrial buildings and pushed down capitalization rates for such transactions to about 6 per cent.”