Real Estate Market

Montreal Area: Half of Single-Family Home Sales Sold for Over $500,000 in April

L’Île-des-Sœurs, May 5, 2021 – The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its residential real estate market statistics for the Montreal Census Metropolitan Area (CMA) for the month of April, based on the real estate brokers’ Centris provincial database.

  • Important note: several statistics for April 2020 are not representative due to the exceptional pause in transactional activities and new property listings during this period. April 2019 statistics are used in calculating variations (for informational purposes). However, April 2020 remains a valid reference in determining variations in median prices and active listings.

“The number of transactions in the Montreal CMA reached a new record of 6,237 sales in April 2021 (+6 per cent compared to 2019). This healthy growth can essentially be attributed to condominium sales,” says Charles Brant, director of market analysis. “In this context, it is astonishing to note that sales of single-family home are below the level recorded for the same period in 2019. The low inventory of single-family homes for sale and the dramatic increase in prices in April continue to drive the demand for condominiums, which are more affordable and have lower maintenance and renovation costs.”

April highlights

  • The real estate brokers’ Centris system recorded 6,237 sales in April, a new record. This level of activity is consistent with that observed in March and should be viewed as a maintenance of activities, not as an acceleration in the number of transactions.
  • The number of sales of single-family properties reached 3,114 which is below the April 2019 level (‑4 per cent), a decline that is more significant than it seems.
  • On the Island of Montreal, 2,399 sales were concluded, a record 17 per cent increase when compared to April 2019 and a level of activity consistent with that recorded last month. This robust activity can essentially be attributed to condominium sales following the same trend as that observed since the start of 2021.
  • Sales are down in most outlying areas compared to April 2019, the result of the drop in transactions in the single-family home category: Laval (609 sales, +4 per cent), the South Shore (1,378 sales, ‑2 per cent), Vaudreuil-Soulanges (271 sales, -3 per cent), Saint-Jean-sur-Richelieu (167 sales, -10 per cent). The North Shore stood out, however, with record activity for the month of April1 (413 sales, +1 per cent).
  • Condominium sales reached a new record (2,466), up 13 per cent from April 2019 across the CMA, which is consistent with the trend noted since the start of the year. Without setting a record, the same goes for small income properties (650 sales, +35 per cent). It is especially outside the Island of Montreal that plex sales have continued to surge. Single-family property sales (2,490) in outlying areas continue to decline: -7 per cent compared to April 2019.
  • Compared to April 2020, active listings of condominiums have increased by 22 per cent (5,298), with plexes also showing an upward trend (1,977 listings, +27 per cent). Active listings of single-family homes remain at an all-time low (4,249 listings, -40 per cent).
  • With market conditions still heavily favouring sellers, median prices are reaching new highs. The median price of single-family properties reached the psychological threshold of $500,000 (+39 per cent compared to April 2020). The growth rate of median prices also remains very high for condominiums and, to a lesser extent, for plexes with respective increases of 23 per cent and 15 per cent.

How Did the First-Time Home Buyer Incentive Change?

On Monday, May 3, the Department of Finance and Canada Mortgage and Housing Corporation (CMHC) boosted the eligibility for the First-Time Home Buyer Incentive (FTHBI). This increase will, in theory, help more first-time homebuyers in three regions (Toronto, Vancouver, and Victoria) be able to afford homes in Canada’s hottest regions.

But what exactly changed, and should you consider using the FTHBI to buy a home? Let’s take a quick look.

What is the First-Time Home Buyer Incentive?

The First-Time Home Buyer Incentive (FTHBI) is a government-sponsored program that lends eligible Canadians 5 to 10% of the price of a home as a down payment. The idea is that by increasing Canadians’ down payments, the government can help lower their monthly mortgage payments, giving Canadians who can’t afford a home an opportunity to finally buy one.

But, of course, that 5 to 10% has strings attached. It’s not a gift: it’s a shared-equity mortgage. That means that the government shares any increase (or decrease) in your home’s value. You don’t have to make monthly payments, or pay any interest. But, in 25 years, or when you sell your home, whichever comes first, the government will use your home’s value to determine how much you ultimately owe them.

Let’s look at an example. Let’s say you bought a $700,000 home in Vancouver, and you’re eligible for a 10% shared-equity mortgage, or $70,000. In 25 years, if your home’s value jumped to $1,000,000, you’d owe the government 10% of your home’s value, or $100,000 — $30,000 more than what you borrowed. Likewise, if your home fell in value, say, to $500,000, you’d only have to repay $50,000, or $20,000 less than what you borrowed.

So, what changed?

While the rules of the FTHBI didn’t change, the eligibility criteria did. Here’s what the changes look like.

  • First-time home buyers with a household income of $150,000 or less can participate (up from $120,000).

  • First-time home buyers can buy a home up to 4.5 times their household income (up from 4 times).

  • First-time home buyers under the incentive can buy a house priced at a maximum of $722,000 (up from $505,000).


    Again, the CMHC has implemented these changes for only three regions: Toronto, Vancouver, and Victoria. All other regions will still follow the former criteria.

    Should you use the FTHBI?

    No doubt, the FTHBI can help struggling Canadians secure their first home. But that doesn’t mean it will be right for everyone who’s eligible. Before you apply, here are some drawbacks to consider.

    1. The FTHBI could severely limit your choices

    The real reason the CMHC has raised the eligibility criteria is, well — no one can find a house in Vancouver, Toronto, or Victoria under the old maximum ($505,000). That was true in 2019 when the program started, and it could still be problematic today under the new criteria.

    To be eligible for the FTHBI, you can’t buy a home that’s more than $722,000. For many Canadians, that will be a challenge. In Toronto, the average price of home has soared to $1 million, and in Vancouver it’s hovering around $1.4 million. You may find a home that’s $722,000, but you’ll likely have to make sacrifices.

    2. You could feel trapped

    Unfortunately, the FTHBI doesn’t transfer to a new home. If you want to move house, you’ll have to repay the government the money you borrowed first, which could lead some Canadians to live longer in a home than they truly want.

    3. You still need to decide if you can afford a home

    The FTHBI gives you a boost, sure, But it may lead you to buy more home than you can reasonably afford. Always take into consideration all the costs of homeownership, such as maintenance, property taxes, mortgage fees, closing costs, and homeowners insurance.

    Bottom line

    In theory, the First-Time Home Buyer Incentive lowers monthly mortgage payments, helping families buy more homes in markets where the housing prices have skyrocketed. But before you apply, weigh the cons against the pros. With the prices of homes skyrocketing, the FTHBY may not be practical for you right now.

    The post How Did the First-Time Home Buyer Incentive Change? appeared first on The Motley Fool Canada.

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What will happen to Bank of Canada rates in 2021?

The Bank of Canada will likely leave the overnight lending rate unchanged for the whole of 2021, according to a recent forecast.

James Laird, co-founder of, said that even with the continuous roll-out of COVID-19 vaccines, full economic recovery might take a considerable amount of time.

“The bank will be patient in raising rates until pre-pandemic economic indicators are achieved,” Laird said. “Therefore, the prime lending rate for variable rate mortgages and HELOCs will remain unchanged.”

This reluctance to rock the boat will also be apparent in the lack of changes to mortgage regulations this year, Laird added.

“The government and regulators are focused on the pandemic recovery; therefore, they will not introduce any new rules which would make it any harder for homebuyers to qualify for a mortgage,” Laird said.

Intensified borrowing and sales activity will likely stimulate growth of 4% to 7% in average real estate prices, “with the strongest growth in the suburbs around major urban centres,” Laird said. “With Canadians working from home, the demand will continue to be strong for more space. Larger homes outside of the city centre will see the strongest demand.”

The condo sector will be the notable exception to these trends, with prices in downtown markets expected to slightly decline in the first half of the year.

“University students learning remotely, the lack of immigration, and the crack down on Airbnb, will continue to weigh on condo prices,” Laird said.

The asset class might find a measure of stability by the end of the second quarter, however.

“When students return to campus and borders reopen for new Canadians, demand will return to the condo market,” Laird said. “With home values surging, condominiums will be the only option for priced out first-time homebuyers.”

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