Condominium resale market makes a strong comeback
The Royal LePage House Price Survey1 and Market Survey Forecast released on July 12 showed that in the Greater Montreal Area real estate market activity continued to improve. In the second quarter of 2016, the aggregate2 house price in the region increased 3.5 per cent year-over-year to$344,620.
“For a second consecutive quarter, the market has strengthened, with sharper price increases than what we observed in the last few years,” stated Dominic St-Pierre, senior director, Royal LePage, Quebec Region. “We observed that buyers are particularly drawn towards two-storey houses, since prices and sales volumes are growing robustly for this property type. Incidentally, this housing segment is witnessing multiple offers in certain cases, a trend that hasn’t been seen in years in Montreal. If this trend continues, the two-storey house category could become a seller’s market by the end of 2016.”
In the Greater Montreal Area, the median price of a bungalow saw a 2.5 per cent increase to $283,755, compared to year end 2015. Two-storey home prices saw a healthy increase of 5.1 per cent to a median price of $437,378, while the median price of a condominium rose slightly by 1.4 per cent to $283,710. These increases indicate the beginning of a transition from a buyer’s market to a more balanced market for condominiums and bungalows, while the two-storey segment trends toward a seller’s market.
According to the survey, the condominium resale market is making a comeback, with inventory slightly declining and sales activity increasing. “The excess supply in Montreal, created by numerous new housing starts over the years, is starting to decline,” said St-Pierre. Condominium sales in the Greater Montreal region grew by 4.4 per cent year-over-year in the second quarter, indicating more vigour than in the past quarters for the Greater Montreal Area.
Forecasts Revised Upwards
While growth in Quebec and the city of Montreal showed less than remarkable results than anticipated, the environment of low mortgage rates, an improved economic climate, rising employment and other factors have boosted demand in residential real estate this quarter. The Conference Board of Canada reported3 that the number of Quebecers who believe this is the right time to make large purchases, such as property, reached 38 per cent.
Looking ahead to the remainder of the year, Royal LePage revised its forecast upwards, to a 3 per cent price increase for the Greater Montreal Area reaching a median price of $350,400, and an increase in sales volumes of between four and five per cent. “The beauty of the Montreal real estate market is that it appreciates at a more steady and predictable rate, compared to Toronto and Vancouver’s hot markets”, concluded St-Pierre. – CNW Telbec