“Prices are already too high,” Jack Lehrer, a broker with Mortgage Rate Montreal, said. “At a certain point people have to wake up and realize they can’t afford these high prices.”
That may already have happened, a realization that could help investors.
The average home on Montreal Island rose just under 5 per cent during the first quarter of 2012, compared to the year-ago period, according to the latest CMHC stats.
That brings prices in Quebec’s largest urban centre closest to the national average in a decade. That growth has also raised eyebrows among financial analysts concerned that homebuyers are increasingly being shut out of the market – a trend they expect to grow given Quebec’s faltering manufacturing sector, and job losses in the aerospace and pharmaceutical industries.
With consumer confidence slipping to its lowest level in three years, homebuyers are expected to defer purchases, effectively bolstering the rental market.
That should accrue to the benefit of investors able to get into the hot Montreal market. That move is still doable, despite the narrowing divide between national prices and rapidly escalating local prices, now within $10,000 of the national average home price of $398,282.
The gap between Montreal condo prices and the national average is slightly narrower, with less than a $4,000 difference.
Still, that isn`t likely to dissuade investors in Ontario looking for opportunities outside of their own pricey markets. Montreal presents an alternative to looking west and an Alberta market challenged by a lack of inventory.
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