Real Estate News

Montreal Real Estate: The Arrival of Fall Marked by a Sharp Increase in Condominium and Plex Prices

Centris Residential Sales Statistics – September 2019

L’Île-des-Sœurs, October 4, 2019 – The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its most recent residential real estate market statistics for the Montreal Census Metropolitan Area (CMA), based on the real estate brokers’ Centris provincial database.

In total, 3,659 residential sales were concluded in September 2019, a 14 per cent increase compared to September of last year and a new sales record for a month of September.

“This September closes the summer season on a very positive note,” said Julie Saucier, president and CEO of the QPAREB. “We are seeing double-digit growth for a third consecutive month, which has not been seen since 2003. We also note that condominium prices are soaring due to a significant drop in inventory,” she added.

Sales by geographic area

Geographically, all six main areas of the Montreal CMA registered a strong increase in sales in September, with Saint-Jean-sur-Richelieu (+31 per cent) leading the way. This was followed by the North Shore (+25 per cent), Vaudreuil-Soulanges (+22 per cent), the South Shore (+15 per cent), the Island of Montreal (+9 per cent) and Laval (+7 per cent).

Sales by property category

Across the CMA, as is now the norm, condominiums registered the largest sales increase in September, as condo transactions jumped by 15 per cent (1,381 sales) compared to September of last year.

Sales of single-family homes registered an equally strong increase, as sales of this property category also jumped by 15 per cent (1,888 sales).

As for plexes with 2 to 5 dwellings, sales rose by 11 per cent with a total of 386 transactions.

Prices

Property prices across the CMA rose significantly in September, particularly for condominiums and plexes. In fact, new records were set for all three property categories.

For condominiums, the median price increased by 10 per cent compared to September 2018 to reach $290,000.

The median price of plexes jumped by 10 per cent to reach $555,750.

As for single-family homes, the median price rose by 6 per cent to reach $355,000.

Number of properties for sale

The number of properties for sale in the Montreal CMA fell for a 48th consecutive month in September, as there were 16,830 active residential listings on the Centris system. This is a 21 per cent decrease compared to last year, and the largest drop that has ever been registered for a month of September since data started being collected in the year 2000.

Average selling times

Selling times currently reflect market conditions that are particularly favourable to sellers, for all three property categories combined. The last time that the average selling time for single-family homes (62 days, -15 days) and condominiums (76 days, -22 days) was this low for a month of September was back in 2004. As for plexes (72 days, -5 days), the last time the average selling time was this low in a month of September was back in 2005.

Bank of Canada maintains overnight rate target at 1 ¾ percent

 

The Bank of Canada today maintained its target for the overnight rate at 1 ¾ percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 ½ percent.

As the US-China trade conflict has escalated, world trade has contracted and business investment has weakened. This is weighing more heavily on global economic momentum than the Bank had projected in its July Monetary Policy Report (MPR). Meanwhile, growth in the United States has moderated but remains solid, supported by consumer and government spending. Commodity prices have drifted down as concerns about global growth prospects have increased. These concerns, combined with policy responses by some central banks, have pushed bond yields to historic lows and inverted yield curves in a number of economies, including Canada.

In Canada, growth in the second quarter was strong and exceeded the Bank’s July expectation, although some of this strength is expected to be temporary. The rebound was driven by stronger energy production and robust export growth, both recovering from very weak performance in the first quarter. Housing activity has regained strength more quickly than expected as resales and housing starts catch up to underlying demand, supported by lower mortgage rates. This could add to already-high household debt levels, although mortgage underwriting rules should help to contain the buildup of vulnerabilities. Wages have picked up further, boosting labour income, yet consumption spending was unexpectedly soft in the quarter.  Business investment contracted sharply after a strong first quarter, amid heightened trade uncertainty. Given this composition of growth, the Bank expects economic activity to slow in the second half of the year.

Inflation is at the 2 percent target. CPI inflation in July was stronger than expected, largely because of temporary factors. These include higher prices for air travel, mobile phones, and some food items, which are offsetting the effects of lower gasoline prices. Measures of core inflation all remain around 2 percent.

In sum, Canada’s economy is operating close to potential and inflation is on target. However, escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies. In this context, the current degree of monetary policy stimulus remains appropriate. As the Bank works to update its projection in light of incoming data, Governing Council will pay particular attention to global developments and their impact on the outlook for Canadian growth and inflation.

Information note

The next scheduled date for announcing the overnight rate target is October 30, 2019. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.