Montreal’s luxury housing market is expected to be the strongest of the spring season.
According to a new report from Sotheby’s International Realty Canada, the city’s hot real estate market shows nary a sign of regressing. On the heels of a 20% year-over-year increase in sales over $1 million in 2018, Sotheby’s expects a sales record this spring.
“With strong economic and political fundamentals driving local confidence and demand, top-tier sales escalated in the first two months of 2019,” read the luxury housing report. “Overall, $1m-plus residential real estate sales (condominiums, attached and single-family homes) were up 6% year-over-year to 111 units sold in January and February. Two luxury properties sold over $4m during this time, up from zero the same months in 2018.”
Of particular significance, luxury condos in Montreal surged 53% year-over-year through January and February 2019. During January alone, transactions in Montreal totalled $1.63 billion, which is an 18% lift over the same month in 2018.
“We expect the Montreal market to continue with its very healthy year-over-year increase in activity,” Sotheby’s President and CEO Brad Henderson told CREW. “It will add somewhat to the upper pressure to price, particularly in the central region. We don’t see risk to that forecast, with the possible notable exception of a foreign buyer tax, which the mayor has talked about from time to time. There’s a good debate in Montreal, and so far they feel supply and demand are not out of alignment, and in many respects Montreal is catching up to Toronto and Vancouver from a price perspective, and that is not an unhealthy thing.”
Down Hwy 401 in Toronto, stability is the name of the game. After managing turbulence last year impelled by new mortgage rules and a series of interest rate hikes, luxury sales in Toronto are expected to exceed last year’s levels.
“High demand is also projected for the $1 million-plus attached home segment in spring 2019, as sales volume experienced significant gains early in the year,” read the report. “Sales over $1m soared 40% year-over-year in the GTA to 182 units sold, and increased 55% in the City of Toronto to 157 units sold.”
However, Vancouver is in tough this spring. Through the first two months of 2019, sales for all housing types in the $1m-plus dropped 52%, with only 270 changing ownership. During the same period in 2018, 576 homes were sold.
“All markets face headwinds from the stress test and high interest rates, so it’s not surprising that activity levels have decreased,” said Henderson, adding that levies on foreign buyers and speculators also stifled market activity.
“Inventories are putting downward pressure on prices. We’re still seeing a market that’s adjusting. It’s very much a buyer’s market and we don’t see that changing for the next 12 months or so.”
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