Move-up buyers, with concerns over further Bank of Canada‘s interest rate hikes, converged on the Montreal housing market in the second quarter of 2023. According to the Quebec Professional Association of Real Estate Brokers (QPARB), year-to-date sales in the Montreal CMA still fall short of year-ago levels (20,477 vs. 26,600), but average price is climbing after bottoming out in January, at just over $529,000. Prices have, in fact, edged up 10 per cent to $583,596 since January.
Equity gains have played a substantial role in today’s market, strengthening the position of existing homeowners looking to upgrade. To illustrate, average price has increased 51 per cent between June 2018 ($385,860) and June 2023 ($583,596), meaning that homeowners have added almost $200,000 on average to their overall wealth in the five-year period through homeownership. Demand is greatest for freehold properties, ranging in price from $950,000 to $2 million at present.
Turnkey properties are most sought-after n the Montreal housing market, given the high cost of labour and construction materials in today’s inflationary marketplace. Proximity to the Metroline is also a priority, given the easy access to the downtown core and points east, west, north and south of the city. High walkability scores are also coveted. Sought-after communities include Le-Plateau-Mont-Royal, Verdun, Villeray, Rosemont and NDG, although some move-up buyers tend to trade up in the areas in which they currently reside.
Condominiums have experienced a nominal uptick in demand from the upwardly mobile, but most move-up buyers are seeking freehold properties, either detached and semi-detached properties or duplexes that offer homeowners an opportunity to generate revenue while they live in one unit and rent the other. Downsizing or lateral moves are also occurring, albeit at a lesser pace.
Financing is somewhat of a challenge, but most move-up buyers have a substantial downstroke against their new purchase.
An ample supply of product is available across all price points. Well-priced and/or unique listings continue to see competition, but fewer properties are generating multiple offers well-over list price. Given solid demand and limited availability of housing stock, momentum in the Montreal housing market is expected to continue into the second half of the year, despite the most recent rate hike.