The number of property sales has experienced a major drop in Montreal in recent months, but this has had only a limited effect on prices, which remain high on the island. The bill for buyers even continues to increase in certain sectors, in particular due to the growing popularity of single-family residences and the expected arrival of the Réseau express métropolitain (REM), analyze the experts consulted by The duty.
During the first three months of the current year, 541 properties were sold in Montreal, down 38% compared to the same period last year, show data collected by the Centris platform. The real estate madness known at the start of the COVID-19 pandemic, which stimulated price escalation in several regions of Quebec, thus seems to have faded.
“Right now, there are very few sales,” confirms economist Francis Cortellino of Canada Mortgage and Housing Corporation (CMHC). “We have the rhythm of the end of 2008 in terms of sales,” he notes, referring to the financial crisis which then severely slowed down the real estate market.
However, despite this lull, the median sale price of condominiums has only decreased by 2.5% in one year in the city, while a 7% drop in the value of single-family residences has been noted. The drop in sales therefore had a limited effect on prices, which remain high in metropolitan France.
“The reason why prices have held up is that there is not enough supply yet”, with the number of properties for sale remaining low, despite a drop in buyer interest, says Dominic St-Pierre , vice-president and general manager for Quebec at the real estate firm Royal LePage.
Always high prices
A more detailed analysis of the evolution of prices in the metropolis shows, on the other hand, several disparities on the territory, noted The duty. Prices fell in particular in several cities on the West Island of Montreal, while they continued to increase in the boroughs of Sud-Ouest, Ville-Marie, Villeray–Saint-Michel–Parc- Extension and Anjou, further east, among others.
In the central districts of the metropolis, the resumption of cultural and social activities after a forced break, due to the pandemic, could explain the greater interest in buying properties in these sectors, indicates real estate broker Marjorie Desmarchelier, of the Urbana Real Estate agency. “It’s a very central and very lively sector and young professionals still like it, even if they are working from home,” she notes, referring to the borough of Ville-Marie, where the price of average sales increased by 5% between the first quarter of 2022 and the same period this year.
In this context, the search for an affordable property in the city can be difficult. Judith Hébert has been trying for two years to find a three-bedroom property in good condition in Montreal, within one kilometer of a metro station, but her budget of $500,000 limits her options.
So far, the only properties that Mme Hébert and his spouse have unearthed which, taking into account their financial capacity, would have required major renovation work, an option that the couple is trying to avoid in the context of the significant increase in construction costs in Quebec. “It’s a bit discouraging,” sighs the aspiring buyer. I didn’t think that with half a million [comme budget], we would be in this situation. »
However, even if the overbidding is less present in the Montreal real estate market, certain properties remain very popular. “For the moment, a property that is well maintained, renovated, generally in good health, it is certain that it will always sell as well,” says broker Charlyse Amoussou, of Via Capitale du Mont-Royal.
The relative gain in popularity of houses with buyers, compared to condominiums, also seems to have contributed to the average growth in selling prices in several Montreal boroughs, noted The duty. In Anjou, for example, where the vast majority of properties sold in 2023 were condominiums, this ratio fell to 40% in the first months of 2023, to the benefit of houses sold in this sector, for which the average sale price increased. accordingly increased by 57%. This price increase was 21% in Ahuntsic-Cartierville and in the borough of Saint-Laurent, while it reached 20% in Dorval, where home sales are popular.
“There are a lot of families looking for houses, more than before,” notes Mme Desmarchelier. “I think that telecommuting and the resumption of part-time work in the office have meant that people need a home with an additional room,” notes the real estate broker. More generally, the “dream” of acquiring a single-family residence remains “extremely attractive”, in particular for “young couples”, indicates for his part Gérard Beaudet, professor at the School of Urban Planning and Architecture of landscape of the University of Montreal.
The role of REM
The selling price of properties has also increased in one year in certain areas of Montreal that will soon be crossed by the REM. This is particularly the case for the boroughs of Saint-Laurent (+21%), Dorval (+20%) and Ahuntsic-Cartierville (+21%). It should be noted, however, that these are also boroughs where a larger share of single-family residences were sold during the first three months of 2023, compared to the same period last year.
“It has an impact for people who buy today and who say to themselves that the REM will pass at some point”, which will give more value to their property, underlines Marjorie Desmarchelier. “It creates a ripple effect” which inflates the selling price of properties, adds the real estate broker.
Charlyse Amoussou predicts that prices will continue to rise in the coming years in the borough of Anjou, which will be served by the extension of the blue metro line, which is expected to enter service in 2029. Since 2021 I have customers telling me they should buy now [à Anjou], before it was more affordable, she says. This contributes to the price increase. »
With Laurianne Croteau