Vancouver and Toronto have been supplanted by Montreal as having the Canada’s hottest real estate market.
“Montreal has been a very healthy market for a number of years, but it’s been overshadowed by the historical performances of Vancouver and Toronto,” said Sotheby’s International Realty Canada’s President and CEO Brad Henderson. “Enter the foreign buyer tax in 2016 for Vancouver and the Ontario Fair Housing Plan in 2017, and both the Vancouver and Toronto markets experienced considerable declines in activity, and as a result what became apparent is how healthy the Montreal market was. We expect this year that we’re going to see the largest number of homes bought and sold in the Montreal area. By that definition, it’s definitely the hottest market in Canada.”
Decades ago, Toronto superseded Montreal as both Canada’s largest city and economic engine. One city flourished as the other floundered; and while Montreal reclaiming that mantle is exceedingly unlikely, that does not mean momentous rejuvenation hasn’t taken root in the city.
Led by a new provincial government, Coalition Avenir Quebec whose leader François Legault is pro-business, Henderson believes Montreal’s best days lie ahead, and one reason is the cost of living for a city its size.
“When you look at the value of real estate in Montreal compared to Toronto and Vancouver, people feel it is a real bargain and has the opportunity to increase over time,” he said. “I’d also say the new provincial government is very pro-business and will attract a lot more business development into the Montreal marketplace. As more investment comes in, more jobs mean more people wanting to buy homes, so we’re very bullish on the Montreal market.”
Unlike Toronto and Vancouver, where values surged at unsustainable rates, Montreal real estate has taken the slow and steady approach to appreciation.
“We’re not seeing 20% increases,” said Montreal-based chartered real estate broker Amy Assaad of Royal LePage. “We see modest ones of 5-8%—condos are around 4%—so it’s still reasonable and attractive. And when things sell for way above asking, the prices are still very reasonable.”
Even the rising interest rate isn’t causing trepidation among Montrealers the way it is for Torontonians and Vancouverites. Assaad says that when real estate valuations are healthy, market inevitabilities like rising rates won’t scare buyers.
“Rising rates are expected and they’re going to keep going up in an incremental way,” she said. “They’re just being a lot more cautious with people who put down under 20% for their own protection, but the interest rates are not drastically increasing to create any instability in the housing market.”