Canada’s housing market has been a bit of a mixed bag lately, but two major cities are bucking the trend and showing signs of a potential resurgence: Montreal and Vancouver. Both experienced significant jumps in home sales in October, fueled by lower interest rates and renewed buyer confidence. Could this be the beginning of a broader market recovery? Let’s delve into the details.
Montreal’s Record-Breaking October
- Sales Soar: Montreal’s Census Metropolitan Area (CMA) witnessed an impressive 44% year-over-year increase in home sales this October, the highest in over two decades. This growth was seen across all property types, with condos up 47%, single-family homes up 44%, and plexes up 34%.
- Condos: Sales surged by 47% year-over-year, driven by increased demand from first-time buyers and investors seeking more affordable options.
- Single-family homes: Sales jumped by 44% year-over-year, indicating strong demand for larger living spaces as families seek more room and outdoor space.
- Plexes: Sales increased by 34% year-over-year, reflecting the continued appeal of multi-unit properties for both homeowners and investors.
- Prices Climb Steadily: The average price of a single-family home rose to $589,000 (up 8% year-over-year), condos reached $414,250 (up 6%), and plexes hit $789,500 (up 7%). This moderate price growth indicates a healthy, balanced market.
- Single-family homes: The average price reached $589,000, an 8% increase year-over-year. In desirable neighbourhoods like Plateau Mont-Royal, prices have climbed even higher, with the average single-family home now exceeding $1.2 million.
- Condos: The average price reached $414,250, a 6% increase year-over-year. While prices vary significantly by location and size, condos in the city center and popular neighbourhoods like Mile End and Griffintown are seeing strong price appreciation.
- Plexes: The average price for plexes reached $789,500, a 7% increase year-over-year. These multi-unit properties remain attractive to investors seeking rental income and homeowners looking for mortgage-helper units.
- Interest Rates Drive Demand: Lower mortgage rates are a key factor, enabling more buyers to qualify for loans and re-enter the market. The Quebec Professional Association of Real Estate Brokers (QPAREB) reports increased activity from first-time homebuyers and those who were previously priced out.
Vancouver Joins the Upswing
- Sales Surge in October: Metro Vancouver also saw a significant jump in home sales, with a 31.9% year-over-year increase. This follows months of slower activity, suggesting that lower borrowing costs are finally enticing buyers back.
- Inventory Rises, Offering More Choice: New listings were up 16.9% year-over-year, providing buyers with more options. This increased inventory could help moderate price growth in the coming months.
- Modest Price Changes: Despite the sales boost, price changes were relatively modest in October. The MLS Home Price Index benchmark price for all residential properties was down 1.9% year-over-year, but some segments saw slight increases.
What’s Fueling This Growth?
- Lower Interest Rates: The Bank of Canada’s recent rate cuts have made mortgages more affordable, boosting demand in both Montreal and Vancouver.
- Strong Local Economies: Both cities boast diverse economies with strong job markets, attracting newcomers and supporting housing demand.
- Population Growth: Montreal and Vancouver continue to see population increases, further driving the need for housing.
What’s Next for These Markets?
While the October numbers are encouraging, it’s important to remember that this is just a snapshot in time. Here are some factors to watch:
- Interest Rate Changes: Future adjustments to interest rates will significantly impact affordability and demand.
- Inventory Levels: Continued increases in new listings could moderate price growth and provide more options for buyers.
- Economic Conditions: The overall health of the Canadian and global economies will influence buyer confidence.
The Bottom Line
Montreal and Vancouver’s housing markets are showing signs of renewed strength, defying the national trend of stagnation. Lower interest rates, strong local economies, and growing populations are creating a favourable environment for both buyers and sellers. However, staying informed about market trends and consulting with a real estate professional is crucial for making informed decisions in this evolving landscape.
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