The Montreal real estate market is one of the major markets in the entire country, alongside that of Toronto and Vancouver. Right now the market for Montreal is on a hot streak, and that predicted by experts to continue well into 2019 and beyond. In fact, many see the Montreal real estate price growth to exceed to that of other cities in the whole of Canada.
Here are some trends to look forward to in the real estate market of Montreal in 2019:
Home Prices Will Still Rise
This is also predicted for many other cities, but the confidence that experts have for the Montreal market is quite strong. In fact, the median prices for homes in the Greater Montreal Area are expected to go up by 3%. In contrast, the increase in the median prices for homes in the Greater Toronto Area is only expected at 1.3%, while it’s only 0.6% for the Greater Vancouver Area. Nationally, median prices in Canada as a whole are expected to rise by 1.2%.
It does seem like the growth rate is decreasing all around, even with the prices climbing up. That is due to certain factors, such as regulatory real estate intervention, the consistently low price of Canadian export oil, rising interest rates, and the inherent risks of global trade.
Demand Will Remain Strong
What’s fuelling the rise in prices is the constant demand for homes from potential buyers with the budget to afford them. The demand is partly due to increasing population growth along with the strong migration, and so these new immigrants to Montreal will certainly need new homes.
The huge peak millennial group consists of the 25 to 31-years old buying a home for the first time, and most of them plan to own their homes instead of just renting. Baby boomers are also planning to sell their empty nest oversized family homes for more suitable smaller houses.
The unemployment rate has also reached historically low numbers. This means more people in the city have jobs and are saving money to buy a home, while new professionals come in to meet the demands for more workers.
There is still high consumer confidence, and economic growth in Montreal is steady. The new Canada-US-Mexico Agreement has also renewed confidence in trade south of the Canadian border.
Finally, it helps that prices on the whole in Montreal are comparatively more affordable than the homes in Toronto and Vancouver. The median prices for the Greater Toronto area are expected to rise to $854,552 in 2019. For the Greater Vancouver area, these prices will be even higher, with forecasts predicting median prices of up to $1,291,144 in 2019.
In contrast, the median prices for homes on Montreal are downright cheap even with the largest jump in prices. Experts say that these median home prices in the greater Montreal area will still be only $421,306 in 2019. That’s less than half the price in Toronto, and less than a third the price in Vancouver!
Continuing Interest from Foreign Investors
When Montreal real estate professionals talk about “foreign investors”, they’re actually referring to Chinese investors. The Chinese economy is still booming, and it’s predicted that the upper-middle and affluent class in China will reach 220 million by 2022. So far, the number of individuals with high net worth has increased by a factor of 9 over the last 10 years.
About two-thirds of these affluent Chinese have international real estate investments. In 2010, Chinese investment in international property was only $5 billion. By 2017, this has increased to almost $120 billion.
Canada has been one of their favourite real estate targets, but lately this interest has been waning. Chinese investment in Canadian residential real estate decreased by 55% in 2017, while interest for commercial property it went down by 61%.
Montreal is the most notable exception to this trend. More Chinese investors are becoming interested in the Montreal real estate market. Experts attribute this to the lower prices of homes in the area, and the taxes imposed by Vancouver and Toronto on foreign buyers surely didn’t help.