Some experts say, however, that the market is just catching up from the spring when sales ceased and real estate purchases were halted.
In August 2020, 4,878 residential sales were concluded, which represents an increase of 39% compared to 2019, according to a report by the Professional Association of Real Estate Brokers of Quebec (QPAREB).
This is, according to the report, the highest number of transactions on record in August since the association began compiling market data in 2000.
“The transaction losses due to the lockdown period in early spring have almost all been recouped thanks to phenomenal commercial activity in July and August, which are generally among the quietest months of the year,” said Julie Saucier , President and CEO of the association. “The pandemic is clearly having an unexpected impact on buyer behavior as there is renewed interest in buying properties, especially single-family homes.
Vaudreuil-Soulanges (62), Rive-Nord (51) and Laval (48) led the field in respective percentage increases, with the Island of Montreal advancing 29%.
Sales of single-family homes (2,601) recorded the largest sales increase (47%).
Francis Cortellino of the Canada Mortgage and Housing Corporation, however, said the figures for 2020 as a whole show a 3% decrease from 2019, which is not a real comparison as the COVID-19 pandemic has completely derailed the market.
From January to March, Crotellino said, sales increased 12 percent; April and May, the markets came to a halt; then they went into hyper-propulsion from June to August as people who had planned to buy in the spring continued to shop.
“Some of those sales were probably due to people who wanted to buy in April and May, but couldn’t because the market was closed,” Cortellino said. “There is catching up. ”
Even with the record sales figures since the market opened from April to August, Cortellino said, sales are down 13%.
One thing is clear, Montreal remains a sellers’ market while the scarcity of units remains.
There were 12,953 active registrations in the Montreal metropolitan area in 2020, 21% less than in 2019.
“It was low and it’s still pretty low,” Cortellino said. “It was a sellers market and we’re still in a sellers market now. ”
Prices for single-family homes rose 24% in August and the median price is now $ 427,500. Single-family homes over $ 1 million more than doubled in August, pushing up the median price.
The median price of condos is $ 312,000, up 12%.
“Against all expectations, this enthusiasm is supported by a noticeable increase in the savings rate of many buyers in recent months,” Saucier said. “The situation is particularly present in the suburbs, where cases of overbidding are increasing and market conditions remain extremely favorable to sellers.”
WHAT ARE YOU COMING?
Montreal’s unemployment rate doubled from February through September, and it remains to be seen how that will affect the real estate market, according to Cortellino.
“In the fall we will have to see how the market adapts to this new reality, but for now there is a lot of catching up,” he said.
Even if the markets cool, Cortellino added, Montreal is unlikely to move from the sellers market to the buyers market anytime soon.
“The real estate market is so tight that it would be unlikely that there would be a major shift in which we go from a sellers market to a big buyer’s market where prices drop a lot or where it really is. hard to sell a unit, ”he said.
Cortellino said other markets in Canada are fairly close to a buyer’s market, so any downturn could easily tip the scales.
In Montreal, it would be a much longer road.
WILL RENTAL RATES DROP?
High sale prices can have an effect on the rental market on the island.
Cortellino said census data since 2016 has shown more young people are renting housing, and this trend is likely to continue, as those under 35 have been the most affected by job loss linked to COVID-19.
“With these price increases that we’ve seen in Montreal right now, it’s probably more difficult for young people to accept ownership of their homes,” said Mr. Cortellino. “A large part of the job losses also concern young people, so it will affect homeownership. ”
According to a CMHC report, approximately 10,000 new rental units will appear on the market in 2020, which is a record.
“This growth in supply will ease the pressure on the rental market,” the report said. “Demand for rental housing will be supported by a slowdown in homeownership, but overall this demand will continue to be heavily dependent on net migration. ”
The migration to Montreal has broken records in recent years and has fueled the low vacancy rate for rental properties, Cortellino said.
The pandemic coupled with the CAQ provincial government policy restricting immigration reduced this trend in 2020.
This will likely negatively affect rental demand, Cortellino said.
“If migration decreases a lot, it is likely that the vacancy rate will increase in the market as it is the main driver of rental demand,” he said.
In addition, there has been a lot of construction for rental purposes in recent years, which means that the supply is increasing.
“Once again we are aiming for records after records with the construction of rental apartments, so there are a lot of peaks coming into the market, and at the same time the main driver of the migration is decreasing,” Cortellino said. . “We’re probably going to have an increase in the vacancy rate. “