The 2022 federal budget made way for a new tax-free savings account (TFSA) designed specifically for first-time home buyers in Canada. The account ultimately combines the advantages of the existing TFSA and registered retirement savings plan (RRSP) – popular down…
- Montreal has experienced rapid growth in house prices for most residential categories from 2020-2022.
- The average sold price of a home in Montreal in March 2022 was $587,415, an increase of 14% year-over-year.
- Montreal’s sales-to-new listing ratio (SNLR) currently sits at 76%, and is potentially slowing down. An SNLR of 70% or more is distinctive of a seller’s market.
- House prices in Montreal are expected to continue to rise throughout 2022.
Montreal Housing Market Outlook (2022)
After a period of sustained growth in 2020, the Montreal housing market surpassed most projections in 2021, with a number of record-setting months in price rises for the city’s housing. On top of this, 2022 has seen further growth throughout a strong first quarter, across all residential categories in Montreal. Like most of Canada, a sustained period of low-supply and high demand has created a fast-moving and sustained upsurge in housing prices in Montreal. Due to the limited inventory available in the city in recent months, sales numbers have also seen a year-over-year decline, as properties become increasingly more difficult to acquire at asking price due to overbidding, quick listings, and fierce competition. Affordability, particularly for young couples, families, and first-time buyers, has consequently become an issue in the city during the pandemic. Further price growth is expected in the remainder of 2022, but at a dampened rate compared to the peak of the pandemic, and the beginning of the year.
Who’s buying Montreal real estate?
First time homebuyers
With a number of federal and provincial first-time homebuyer incentives available in Quebec, plus lower housing costs compared to Toronto and Vancouver, Montreal is still a comparatively more accessible market than a few major urban centers in Canada. However, affordability is still an issue. According to the Quebec Professional Association of Real Estate Brokers, young households, particularly those without access to capital from family members, are increasingly resorting to condominiums in Montreal. Many are staying in the rental market, a trend that has allegedly been echoed in fewer resale market transactions.
Much of the foreign investment in Montreal’s real estate sector centers around creating profitable rental opportunities. In this respect, plexes have become a hotspot for investment due to their versatility and rental prospects. Single-family homes, likewise, have become more appealing to outside investors, in part due to Montreal’s comparatively low acquisition costs compared to Toronto and Vancouver.
However, as foreign investment continues to stoke the flames of an already superheated housing market, the Canadian government recently introduced a 2 year ban on foreign home buyers. Whether these measures help to cool the market, or improve accessibility for Canadian residents, remains to be seen. For many, foreign investment in Canadian real estate is little more than a scapegoat for an overheated domestic housing market.
The luxury housing sector in Montreal saw an upswing of demand from foreign buyers during the pandemic, according to Sotheby’s International Realty Canada. Changes in housing preferences, easy access to borrowing, and pent-up local and international demand were cited as compounding factors in the city’s luxury real estate boom. According to Sotheby’s, sales over $1 million rose 27% year-over-year, between the start of 2021 and 2020. One ultra-luxury property sold for over $10 million, a price level which saw zero transactions the previous year. In the $1 million-plus market for single-family properties, the city saw a 30% increase in sales between the beginning of 2020 and 2021, with condos in the same price range remaining stable. Since 2021, however, the luxury condo market in Montreal has flourished. Sales over $4 million were up 140% year-over-year, and around one in three $1 million-plus sales across the residential market were in the luxury condo category.
Average Home Prices in Calgary
Average house prices in Montreal have increased considerably throughout the pandemic. Compared to March of last year, the average price of single-family detached home in the city has gone up by 17.6%. Condominiums have seen a price increase of 16%, and plex properties (duplex, triple, etc), have gone up by 17%. Overall, residential property prices have increased by 14% in Montreal since March 2021, following a similar year of growth in 2020.
|Property Type||Average Price (March 2022)||Year-on-year Price Change (%)||Units Sold (March 2022)|
|All property types||$587,415||+14%||5493|
Montreal Breakdown by Region for 2021-2022
Here are some examples of Montreal neighborhoods and their respective sale prices by the first quarter of 2022. Typically speaking, property prices are higher towards the city’s downtown core compared to suburban Montreal and its surrounding areas. However, house prices in every jurisdiction of the Greater Montreal Area have increased during the pandemic, as the city continues to break housing price records for the sixth month in a row, as of April 2022.
|Region||Average sold price (Q1 2022)|
Reports Indicate Strong 2022 for Montreal Housing Market
The first quarter of 2022 had multiple consecutive record-breaking months for the average price of a property in Montreal. In the single-family market category, the median price of a home increased 20% in the first quarter of 2022, hitting $636,200. According to Royal LePage’s recent House Price Survey and Forecast, the market is set to experience continued growth, but at a comparatively slower rate than the start of the year – which was likely fuelled by pre-emptive buying in anticipation of interest rate hikes. Royal LePage forecasted a 12.5% price increase in the average cost of a home in Montreal, up to $599,200. Other outlets foresee more moderation in Montreal’s real estate outlook this year. A recent article by RBC has focused on falling resales and an estimated drop in the ratio of sales-to-new listings in March as an early sign the market is set to return to a healthier balance. Ultimately, however, with inventory at an all-time low, we are unlikely to see any significant reductions in the price of a home in Montreal in 2022. For now Montreal remains, and will remain, a seller’s market.
Frequently asked questions
Is the Montreal housing market going to crash?
With rising interest rates and a ban on foreign buyers, we may see a slowdown in the market towards the tail end of the year, but it’s highly unlikely that the Montreal housing market will crash in 2022. Prices continue to rise and inventory remains low, across almost all property types. Demand is predicted to continue rising throughout 2022. As long as this demand outpaces supply, housing in Montreal will continue to be a growing sector from a price perspective.
Will Montreal housing prices increase in 2022?
Several stakeholders, including realtors, the Quebec Professional Association of Real Estate Brokers, financial institutions, and realty companies have predicted increases in the price of housing in Montreal in 2022, albeit to varying degrees. At the conservative end of the spectrum, price rises of between 2-5% are anticipated, with other outlets forecasting upwards of 12%-15%. Numerous market factors will affect how price changes in Montreal’s real estate will play out, such as interest rates, buyer behavior, and supply levels.
How do I get approved for a mortgage in Montreal?
If you want to get a mortgage in Montreal, you can begin by exploring today’s mortgage rates, then see how much mortgage you could afford. Approval criteria will vary based on the lender you want to go with, so it’s worth discussing these factors with one of our mortgage advisors to see what solution fits for you. At nesto, we compare the best rates available for mortgages in Montreal, and we also lend directly.
Montreal has seen an unprecedented surge in house prices throughout the pandemic, a surge which is likely to continue for the remainder of the year, though perhaps at a cooler rate. Montreal has finally begun to see the kind of market growth that cities like Vancouver or Toronto had for many years pre-pandemic. However, Montreal still remains comparatively more accessible than both the Vancouver or Toronto housing market, which have both seen staggering increases in price over the last two years. If you’re ready to buy a property in Montreal, get in touch with us today, and we’ll help you take the next steps in buying your dream home.
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