Month: April 2018

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25 Apr

Why you shouldn’t bet on a Montreal housing bubble

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Posted by: Frederic Pichette

The Haider-Moranis Bulletin: Montreal’s housing market is booming, but there are a few reasons to be skeptical the city is headed down the path of Toronto and Vancouver

Earlier this week, final numbers were released on the Montreal housing market for 2017, and unlike Vancouver and Toronto, Canada’s second-largest city posted strong gains in sales.

No fewer than 44,448 housing units transacted in the Greater Montreal Area in 2017, an eight per cent increase over 2016. At the same time, housing prices increased by 6 per cent year-over-year to reach $364,500. At $467,500, housing prices on the Island of Montreal were significantly higher than the suburbs. (Still, compared to Toronto and Vancouver, housing prices in Montreal seem like a bargain.)

While single-family homes registered a three per cent increase in sales, condominium sales were up by 17 per cent in the Montreal region. In December alone, condo sales were up by 35 per cent.

Those robust housing returns have fuelled a sense of optimism, with some industry watchers in Quebec eager to proclaim that the housing market is on fire.

The newfound exuberance has also raised concerns about possible government intervention, like the foreign homebuyers’ taxes in Toronto and Vancouver, to guard against the housing price inflation in the future.

Already Valérie Plante, Montreal’s newly elected mayor, has broached the subject with Quebec’s minister of municipal affairs.

There are, however, a number of reasons to be skeptical that Montreal is indeed headed down the path of extreme housing price growth that has gripped the Vancouver and Toronto markets.


One reason that fears of price inflation are largely exaggerated is because Montreal’s gains so far have been relatively modest, and come after decades of muted growth.

Concern about the influence of foreign buyers also appears to be exaggerated, despite stronger sales in the high-end market.

In 2017, sales of homes over a million dollars were up by 20 per cent, and condominiums over half a million dollars reported a 42 per cent increase.

While the share of non-resident owned properties increased significantly from the level in 2016, Canada Mortgage and Housing Corporation reported that the difference in asking and sold prices were the same for foreign and domestic owners in Montreal, suggesting their impact on prices overall were not as great.

Housing starts are another reason to be skeptical of a bubble.

Unlike Toronto and Vancouver, where construction of new housing slowed down in 2017, Montreal experienced a big jump in housing starts that is likely to mediate housing price increases in the future. Last year, construction commenced on 24,756 housing units in the Montreal Census Metropolitan Area. Most of those units were condominiums.

Then there is the fact that the most distinguishing features of Montreal’s housing market — tenure and structure — also work against the potential for a bubble.


The city of Montreal proper is a city of renters where two-thirds of the households rent. Furthermore, apartments (including condominiums) account for 86 per cent of the housing stock.

Condominiums are smaller in size and are therefore relatively cheaper to own or rent. Households living in condominiums or apartments are also relatively smaller in size. The 2016 Census revealed that renters in Montreal, on average, spent $835 on housing-related costs that included rent and utilities.

With a majority of the housing stock in Montreal being apartments or condominiums and 59 per cent of the households being single-person households or couples without children, the prospects for a rapid increase in housing prices in Montreal are rather farfetched: Rental units and smaller-sized households are not the usual suspects for creating housing bubbles.

That said, the robust performance of housing markets in December is good news for Montreal. For decades, city’s housing market trailed behind those in Toronto and Vancouver. Even urban housing markets in Alberta accelerated at faster rates than Montreal when crude prices were high.

Instead of imposing new taxes, Montreal should focus on increasing the supply of housing to keep prices in check. One of new mayor’s campaign promises was to compel developers to set aside 40 per cent of the units in a new development for social and affordable housing. Developments with fewer than 50 units would have the option to contribute to a housing fund instead.

Plante may want to revisit her plans to increase affordable housing in Montreal. She is on the right track by focusing on housing supply. A less prescriptive approach to new housing developments is likely to increase the supply of regular and affordable housing.

Murtaza Haider is an associate professor at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at

13 Apr

House prices in Montreal continue their year-over-year ascent

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Posted by: Frederic Pichette

Median price of a two-storey home during first three months of 2018 was $492,751, an increase of 8.3 per cent from last year, Royal LePage says.

The limited number of houses on the market in Montreal is pushing prices up, said Georges Gaucher, the general manager of Royal LePage Village in Notre-Dame-de-Grâce.

“Inventories of two-storey houses and bungalows are low and when you have that phenomenon, what happens is people start bidding for houses,” he said.

The median price of a two-storey house sold in the Montreal area during the first three months of 2018 by Royal LePage was $492,751, the real estate firm said on Friday. That’s an increase of 8.3 per cent from the equivalent period the year before. 

The biggest gain was in the western part of Montreal Island, where the median price rose 14.4 per cent year-over-year to $549,226, an increase of 7.2 per cent from the previous quarter.

In central Montreal, prices were up 13.9 per cent, year-over-year, to $686,253, though that was only a slight increase from the last three months of 2017.

The median condo price in the region rose to $314,554, a 3.5 per cent year-over-year increase, according to the real estate firm.

The biggest increase was in central Montreal, where condo prices rose 5.4 per cent year over year to $382,902.

Royal LePage credited that growth to the shortage of single-family homes on the market pushing people to buy condos and the absorption of the supply of condos on the market.

With a strong local economy, Gaucher said he’s optimistic about the outlook for the city’s real estate market.

“We’re living in great times,” he said.

Another measure of house prices, released on Thursday, shows less growth.

The Teranet–National Bank House Price Index was up 4.27 per cent for the Montreal region in March, when compared to March 2017.

However the index, which compares the resale value of houses that have sold more than twice, was down 0.17 per cent when compared to February.

The Greater Montreal Real Estate Board, which released a report last week, put the price of a single family home in the Montreal region at $314,900, an increase of five per cent from March 2017.

On Montreal Island, according to the GMREB, the median price of a single family home in March was $463,000, up four per cent from the equivalent period the year before.

It said the median price of a condo sold on the island in March was $290,000, up less than one per cent from $289,500 in March 2017 and down three per cent from $300,000 in February.

The number of sales was up six per cent from 2017 in March, while the number of listings on the market was down 16 per cent, according to the GMREB.

5 Apr

Greater Toronto Area home sales dip 39.5 per cent from March 2017

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Posted by: Frederic Pichette

ara Deschamps , The Canadian Press
Published Wednesday, April 4, 2018 5:38AM EDT 
Last Updated Wednesday, April 4, 2018 10:40AM EDT

TORONTO — Canada’s largest real estate board said Greater Toronto Area home sales in March were down 39.5 per cent from a frenzied pace last year, as the market continued to feel the effects of cooling measures introduced at both the provincial and federal levels.

Both sales and price figures reported by the Toronto Real Estate Board on Wednesday dropped significantly from last year — what some observers consider a market peak –when home prices and sales skyrocketed and bidding wars became the norm, pushing the Ontario government to introduce a package of measures last April to cool the market.

That was followed by a financial stress test for buyers, which officially came into effect on Jan. 1 for federally regulated lenders, following an October announcement by the Office of the Superintendent of Financial Institutions. In addition, both variable and fixed-rate mortgage rates have risen over the past year as a result of moves by the Bank of Canada and fluctuations in the bond markets.

March’s sales figures were also down 17.9 per cent compared with averages over the last 10 years, while the number of new listings decreased by three per cent.

New sales listings totalled 14,866, representing a 12.4 per cent drop from last March, which helped to keep the market balanced between supply and demand. The low level of homes for sale helped keep prices in check, rising 2.2 per cent compared to February.

Sales also rebounded from the month before, leading BMO Capital Markets economists Robert Kavcic and Jennifer Lee to interpret the numbers as a sign that the market “is showing more signs of stabilizing.”

“While active listings are still more than double a year ago, we’re seeing a slow tightening of conditions off the mid-2017 lows,” they said, in a note Wednesday morning. “Keep in mind, too, that the market was drum-tight a year ago.”

However, when compared to last March, the average price of a home in the GTA was down 14.2 per cent to $784,558 last month, a decrease from the average of $915,126 in the same month last year.

Despite the decrease, TREB predicted home sales will be up relative to 2017 in the second half of this year.

“Right now, when we are comparing home prices, we are comparing two starkly different periods of time,” said Jason Mercer, TREB’s director of market analysis.

He said there was less than a month of inventory last year versus two and three months this year.

“It makes sense that we haven’t seen prices climb back to last year’s peak,” Mercer said. “However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings.”