Look out Vancouver: Montreal may be country’s hottest market

The Teranet-National Bank National Composite House Price Index was 4.4% in April, year over year, up from March’s 4.1%. But the largest single year-over-year gains that month were 7.5% for Ottawa, followed by 7.4% for Montreal. Home prices in Vancouver shot up a much more modest 5.8%, only points ahead of Halifax's 5.3% and Toronto's 4.1%.

Although the T.O. 12-month inflation was the smallest, that market, along with Ottawa, was the only one to accelerate for a second consecutive month. Prices in Calgary were down 3.5% from a year earlier, making April the seventh consecutive month of 12-month deflation.

While brokers in Montreal don't envy that stunted growth, they remain concerned that prices in their market are picking up speed and leaving too many prospective clients behind.

“Prices are already too high,” Jack Lehrer, a broker with Mortgage Rate Montreal, told MortgageBrokerNews.ca. “At a certain point people have to wake up and realize they can’t afford these high prices.”

Those concerns are increasingly voiced by brokers across the island, pointing to other reports also pegging Montreal’s price growth as the highest in Canada. May’s Metro Resale Index from the Conference Board of Canada identifies Montreal as one of the very few markets in this country headed toward a year-over-year price increase of more than 7%. Saskatoon, Gatineau, Québec City, Sherbrooke, Trois-Rivières and Saguenay are also part of the exclusive club.

“I saw the shift immediately after the government brought in the new mortgage rules,” Terry Kilakos, an AMP with Multi-Pret Mortgages, told MortgageBrokerNews.ca. “The quality of the clients that we’re seeing became significantly better, but we were seeing fewer clients and a significant slowdown. If prices rise significantly, we could eventually see business slow because the salaries of Montrealers haven’t kept up.”

The Conference Board data suggests Quebec’s biggest city came in ahead of both Victoria and Vancouver, which should see no more than a 7% increase in housing prices over the next year, according to the report, which bases it projections on both current and historical data.

Short-term year-over-year price growth for Calgary’s housing market is expected to be in the five to seven % range, while Toronto should see no more than a 3% rise.

The Montreal picture painted by the board coincides with stagnant wage growth in Quebec, as the province’s manufacturing and tourism sectors suffer through a slowdown of their own. Montreal wages are, in fact, among the lowest of any major Canadian city.

The federal government’s move to lower the ceiling on amortization to 30 years, from 35, has also eroded the ability of many Montreal residents to qualify for mortgages. Any price growth would further limit the number of new purchases for brokers servicing all but the high end of the market. That hasn’t yet happened, said Kilakos.


Mortgagebrokernews.ca is a division of KMI Media.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Get help choosing the best mortgage rate

Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs

  • How soon do you want a mortgage?
  • Name
  • Where do you live?
  • Phone number
  • E-mail address

Industry news

Submit a press release


Do you invest in commercial properties?