Although Montreal and Toronto both have thriving real estate markets, they appeal to different types of investors, and the question of which city is “better” tends to spark heated debates between contenders. The two cities are worlds apart; while they are both culturally diverse, one is a laid-back, Francophone metropolis with a quaint European charm while the other is a fast-paced, Anglophone business-hub.
Still, the two cities continue to compete for the title of The Best City in Canada, and outdo each other on different rankings.
When it comes to buying real estate, here are some distinctions to keep in mind while deciding between Montreal, or Toronto.
Montreal vs Toronto: Average Real Estate Prices
According to the latest (July 2016) Canadian Association of Real Estate statistics, the average home price is $710,000 in Toronto, while only $349,000 in Montreal. Digging deeper into the price curve, Toronto’s cheapest homes (the ones with an hour’s commute into the city center) are priced at an average of $200,000, while homes in the Downtown area go for an average of $777,707. In Montreal, the average home an hour out of town can be purchased for as low as $80,000 while the average price Downtown is $270,772.
Montreal vs Toronto: Property Value Growth Rate
It’s no secret that Toronto has been experiencing near-exponential growth rates in market value over the past few years. The House Price Index recorded a 3.14% monthly increase in Toronto (a 13.25% year-over-year change). Montreal on the other hand continues to be a slow and steady market, showing 0.61% monthly increase and a +3.10% annual trend between June and July of 2016.
While Toronto’s quick growth has had investors eager to stock up their portfolios, the market also comes with legitimate concerns about the future and sustainability of these financial results. The surging prices make the city “extremely vulnerable” to an economic or financial shock, with increasing concerns a potential housing bubble. (Chris Sorensen, Macleans). Efforts to cool the market are already underway with Scotia-bank curtailing their mortgage and talks of implementing a 15% luxury tax for foreign investors, as was tried and tested in BC. All in all, Toronto is appealing to those who can afford the skyrocketing prices, as well as the investment risks that come with them. On the other hand, Montreal presents a safer and more stable investment alternative, with prices on a modest increase year over year.