REAL ESTATE NEWS & STATISTICS

Trying to save downtown Montreal

July 29, 2020

The decline of the downtown cores—at least in North America—is a process that started long ago.  It is generally accepted that this decline started right after the end of World War II and has continued since then.

Fortunately for Canada, our big cities: Toronto, Montreal, Vancouver managed to escape the fate of many American cities. Instead, our cities were able to keep vibrant and safe downtown areas. Moreover, and particularly in Montreal’s case, an important factor in its favour was a constant presence of residents in the immediate neighbourhood of the city core.  People for which “going downtown” was always a natural thing. Not only that: residents of other areas in the city always regarded downtown as the place to come, and not just for things that may require their physical presence, but the place where to find the best stores, restaurants, and theatres.

However, this state of things for downtown was always fragile.  New suburban real estate developments, deterioration of some local services, excessive traffic disruptions and their subsequent detours and lack of parking space were already making it difficult for downtown businesses to attract customers. All of that, before the pandemic, which, of course, has made things much worse in just a few months.

In response to this situation Mayor Valerie Plante announced last week a rescue plan, together with an emotional plea to Montrealers to visit the area, shop here, support its restaurants. She also allocated 400,000 dollars for a program that would include enlarged spaces for terrasses, and subsidized parking at Complexe Desjardins and the Palais des Congrès. Part of that money will also be used for artistic performances on the streets.

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Montreal Times

Reopening Canada: The deep freeze is over, but housing market still a long way from normal

June 25, 2020

May sales were up 57 per cent from April, but housing activity – sales and new listings – is down 40 per cent from a year ago.

Canada’s most expensive cities may be on the brink of fully reopening, but when it comes to their residential real estate markets things are a long way from normal.

In Vancouver, the days of packed open houses for 100-year-old, three-bedroom detached houses priced at $1.2 million may be long gone, but so too is the pandemic-induced freeze on housing activity that gripped the market in April and May.

Now prospective buyers carefully enter thoroughly sanitized homes, donning masks and spending as little time as possible while touring.

“We screen people who enter and exit homes very diligently. Almost all the showings are done with buyers’ agents,” said Steven Saretsky, a Vancouver realtor and housing analyst. “It’s a little bit more work and effort, because there are more private showings as opposed to funnelling people through one house and collecting offers after.”

June is behaving more like the traditional spring market in April and May, usually the busiest months but pushed aside this year because of the shutdown. And Saretsky believes the trend will last into July and August. “If we see any market correction it likely won’t be until Q4 when mortgage deferrals begin to expire,” he said.

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The Montreal Gazette

High unemployment, lower immigration to restrain Canadian housing market

June 24, 2020

Buyers fearful for their economic future are less likely to make big-ticket purchases, pressuring sellers to lower prices.

Canadian house prices will rise at a much slower pace this year than predicted only three months ago and will fall in 2021 as the coronavirus pandemic pushes up unemployment, curtailing immigration and the demand for homes, a Reuters poll showed.

Lockdown restrictions to stop the spread of the virus, which has infected over 100,000 people in Canada, have disrupted supply chains in the resource-heavy economy.

Despite aggressive interest rate cuts from the Bank of Canada and emergency government spending,

including help to furlough workers during lockdown, the economy is in its deepest recession on record.

While Canadian home prices rose 0.1% in the month of May, yielding the strongest annual gain in two years, the June 9-23 poll of 17 economists and housing market analysts showed average house prices across the country would rise just 1.5% this year compared with the 4.5% forecast in a March poll.

Buyers fearful for their economic future are less likely to make big-ticket purchases, pressuring sellers to lower prices. Unemployment hit a record high of 13.7% in May and may rise more as businesses plan their future.

“Hopefully unemployment will be low enough when most financial bridges and mortgage deferrals end,” said Sebastien Lavoie in Montreal, chief economist at Laurentian Bank Securities, who expects that two-thirds of those currently jobless will be called back to work by the end of this year.

“A small but not negligible share of job losses recently will end up in long-term unemployment. Also, COVID-19 anxiety weighs down on labor market prospects, delaying housing purchases. A key risk specific for Canada is tied to the achievement of the federal immigration targets, which underpinned housing demand in recent years.”

In a worst-case scenario, Canadian house prices were forecast to tumble 8.0% this year, according to the poll.

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The Montreal Gazette

Montreal VS Toronto: A Comparison For Real Estate Investors

June 29, 2020

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.

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