The contrast between Montreal and Toronto is decreasing

Le contraste entre Montréal et Toronto se résorbe

Photo: Olivier Zuida The Duty
The Greater Montreal would have reached the state of overheating, but a surge in prices does not appear on the radar.

The real estate activity remains rather strong in Quebec, as the market is rather stabilized in ontario. The Greater Montreal would have reached the state of overheating, but a surge in prices does not appear on the radar.

To resume the qualifier Hélène Bégin, senior economist at Desjardins group, the year 2018 has been outstanding for the residential market in Quebec. In the existing, the number of transactions performed on the system multiple listing jumped by 4.9% to 2017, to establish a new peak. Strong demand combined with a limited supply of properties for sale has led to an average rise of 5.2 per cent of the price, a progression rather felt in Montreal, but that is true in all regions.

Montreal, [and Ottawa] are now overheating due to the more intense activity

— Hélène Bégin

Meanwhile, in Ontario, the balance sheet of 2018 has been negative in spite of a recovery in the second half. Sales of properties have dropped by 17 % and the average selling price decreased by 2.7 %. “In Ontario, the real estate market recovers from the correction that followed the tightening of the mortgage rules the federal government in January 2018,” writes the economist, Desjardins.

The contrast, establishing more of a comparison between Montreal and Toronto, continued in February. The real estate board of Toronto, on reported on Tuesday, a decrease of 2.4 % in the number of homes sold in the region, while the number of new registrations fell by 6.2 %. For its part, the professional Association of real estate brokers of Quebec has indicated that home sales in the Montreal metropolitan area have increased by 8 % compared to February 2018. On the other hand, the average sale price of all types of properties amounted to 780 397 $ in the Greater Toronto area. It was 388 398 $ in the metropolitan area, 505 780 $ on the island of Montreal.

“Montreal, [and Ottawa] are now overheating due to the more intense activity. This situation occurs when the demand for homes is too strong compared to the pool of properties on the market, which leads to an acceleration of the price […] The Toronto market is [for him] away from this area since the tightening of mortgage rules “, stressed Hélène Bégin, who, however, takes care to add that, according to the canada mortgage and housing corporation (CMHC), ” the level of overvaluation of the price, however, remains low in both Ottawa and Montreal “.

For the future, the projections allow us to anticipate a certain lull this year. “Even if the rise in interest rates seems to be on hold for a certain time, the Bank of Canada has already raised its key rate five times since mid-2017. The consumption expenditure is sensitive to the credit fizzle out already. Sooner or later the real estate market will do the same. “

Adds a background trend due to an aging population, which will exert a growing influence over the next 10 to 15 years and that will add to the craze for the rental market segment, the construction of which is already experiencing a boom since a few years. “According to the CMHC, the dynamism of the labour market and immigration have promoted the formation of households last year. The aging population has also helped to support the rental market, which offers an attractive option for independent seniors ” retains Hélène Bégin.