Montreal is poised to become new capital of luxury real estate

Calgary and Montreal are on track to eclipse Toronto and Vancouver as Canada’s fastest growing luxury real estate market this year as rising consumer confidence boosts demand for homes over $1 million.

A new Sotheby’s report on the luxury sector shows sales of $1 million-plus homes in Montreal increased by 20 per cent to 104 units in the first two months of this year, while transactions in Toronto and Vancouver flagged amid headwinds from government policy interventions.

“Montreal has been Canada’s ‘dark horse’ in luxury real estate,” said Brad Henderson, president and chief executive of Sotheby’s International Realty Canada. “For many years, political uncertainty and a stagnant economy tethered performance, but those factors have now dissipated. This spring, we expect strong gains that will set new records for the city.”

An uptick in luxury sales is also expected in Calgary as growth in the province’s gross domestic product exceeds expectations and an increase in oil prices, manufacturing exports and population flows improve consumer confidence. Sales of real estate priced over $1 million rose 45 per cent to 94 units in January and February compared to the same period a year ago.

Meantime, luxury markets in Canada’s two largest metropolitan areas posted significant declines as a series of new market-cooling measures took effect. Last April, the Ontario government introduced a package of measures including rent controls and a 15 per cent foreign buyers tax. And in January, the Office of the Superintendent of Financial Institutions tightened qualification rules for uninsured mortgages.

In the Greater Toronto Area, sales of properties worth over $1 million tumbled by 55 per cent to 1,498 units, and 56 per cent to 31 units for $4-million homes in January and February, Sotheby’s said. Sales of Toronto condominiums worth over $1 million were down 10 per cent in the first two months of the year.

In Vancouver, sales of single-family homes worth over $1 million fell 39 per cent to 193 units in the first two months of the year, even as the city’s condominium boom continued. Transactions of condos worth more than $1 million soared 51 per cent to 232 units sold.

Sotheby’s cautioned that the Toronto figures presented an “incomplete picture,” when compared to the first quarter of 2017, a period when sales soared to record levels.


New Montreal program to refund some home buyers up to $15,000

In a bid to keep potential home buyers in the city, Montreal has approved a program that refunds buyers up to $15,000.

To be eligible, there are strict criteria that include where to buy and how much to spend, explained Mayor Valerie Plante on Wednesday.

“It covers many realities. It will about direct financial support for people who want to stay on the island, and this is what we want more than ever,” she said.

Some details of the residential acquisition support program:

A single buyer purchasing a new development for a maximum price of $225,000 will receive $5,000 from the city.
A family buying a new development for a maximum price of $400,000 will receive $10,000.
A family purchasing a new property in what’s considered the downtown core would receive $15,000 from the city if the property costs a maximum of $450,000

“We are simplifying the process. The financial support will come way faster than before,” said Plante.

Those who purchase an existing home will see money back – but it’s a little less lucrative.

Families who spend a maximum of $630,000 will receive between $5,000 and $7,000 back from the city.
“It’s more generous. It used to be $7.4 million and we’re investing $21.2 million annually,” she said.

How feasible are those home prices, considering the market?

You won’t get a lot of property for that price, said real estate agent Amy Assaad.

“I would say in the downtown core you’re looking at 750 square feet, so for a young family with a child under 12, it’s feasible. For two children, maybe a little more difficult,” she said.

There are areas, she said, where you can get more for less.

“If you’re looking at the eastern side of Ville-Marie, which is considered downtown, there’s a lot more space and you can comfortably fit a young family,” she said.

Plante asserts that the program is meant to stimulate the market and encourage people to buy and sell.

Considering the volume of condos being built., experts say the landscape of Montreal will inevitably change.

“The density of these condos has increased tremendously. A lot of these condo projects are 50 floors high, so I think it’s just going to change the skyline of Montreal, so instead of using the space they’re just basically going to go up,” said Assaad.

The program applies to all buyers, not just those buying for the first time.

It begins June 1st, but home buyers in May are still eligible.