Buyers Flood Montreal Housing Market After Relaxing Real Estate Restrictions

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MONTREAL – House prices in the Montreal region rose dramatically in June, as first time buyers flooded the Montreal housing market following the easing of real estate restrictions. Experts say new buyers increase demand more than others because they don’t leave a house vacant when they move. When many of them hit the market at the same time, vacancy rates suffer.

The most dramatic increase was the median price of a two-storey house in the greater Montreal area, which rose 8.7% this quarter to $ 566,874, according to a recent Royal LePage study. . A bungalow will cost $ 351,889, up 7.2% from last year. And while the availability of condos increased in June, increased demand pushed prices up 5.6% year over year.

“Given the offer [before COVID-19], it would take 3 months to sell all the homes, “said economist Francis Cortellino of the Canada Mortgage and Housing Corporation. He says that high demand puts buyers at a disadvantage, with few bargaining power. “We are in the market of a seller,” he said.

“In my 18-year career, I have never seen such a close ratio between the number of active registrations and sales,” said Dominic St-Pierre, Royal LePage vice-president for Quebec, in a press release Thursday.

Experts agree that the supply of housing was tight after COVID-19 halted residential construction in the province. “Many of these projects are behind schedule,” said Georges Gaucher, spokesperson for Royal LePage. “Deliveries will be late. ”

In June, more than 40,000 homes were under construction in the province, a distant third in Canada, with Ontario more than double that number of projects underway. In Quebec, only 11% of these projects will become fully semi-detached houses, the vast majority being apartments.

Although condos remain popular in Quebec, single-family homes are favorable to buyers, according to Gaucher. “Think of the standard bungalow,” he said. “We are far from the demand we have.”

COVID-19 could have the opposite effect for those looking to rent. Cortellino says switching to online university courses could reduce net migration, opening rental housing in a city where vacancy rates remain around 1.5%, a 15-year low.

Expert prices are expected to decrease after the COVID rush ends, but long-term increases are inevitable. Overall prices are expected to increase by 3.5% by the end of 2020, compared to last year.

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