First-time buyers will definitely not find the market an easy place to get into
In its latest forecast, the Quebec Federation of Real Estate Boards announced that home sales prices in Montreal will achieve new peaks this year and the next, although with the caveat that the rate of growth will be lower than the heights seen in 2017.
If trends from the first 10 months hold, the average sale price of a single-family property in Montreal will grow by 3.2% annually this year, up to $320,000. Condo values will also increase by 4%, up to $256,000.
While these would make 2018 the 22nd straight year of home price increases in the region, the single-family rate will still be lower than last year’s 7%.
By 2019, single-family price growth will be at 4% (up to $332,000), and condo values will go up by 3% (to $263,000).
“All the areas of the Montreal metropolitan area will be hot and remain hot in 2019, including the island of Montreal, but there is a little more supply in the suburbs and we will see a lot of first-time buyers want to get into the market now because they fear that the mortgage rates will go higher, so I think the suburbs will have growth in sales a little bit stronger than the island of Montreal in 2019,” QFREB manager of market analysis Paul Cardinal told the Montreal Gazette.
Read more: Condo sales still driving the Montreal market’s dynamism
Desjardins senior economist Hélène Bégin predicted that the Bank of Canada might implement two more rate hikes in 2019, and the steady upward trajectory of mortgage rates would definitely make itself felt among first-time buyers.
“It’s going to limit the amount they can borrow, so it’s going to limit the increase in prices, they will have to make a compromise, sometimes it means a smaller dwelling, sometimes it means going further from downtown but I think they will still be on the market,” Cardinal explained.
