Quebec’s economy has been one of the country’s feel-good stories of 2017. After the provincial Liberal government spent a few years getting its fiscal house in order, consumer confidence in the province is higher than it’s been in a very long time.
Laurentian Bank Securities’ Chief Economist Sébastien Lavoie says that although Montreal’s housing market is not as heated as Toronto’s and Vancouver’s, that isn’t necessarily a bad thing.
“The tailwind was better than I expected,” said Lavoie. “In the last 12 months in Quebec, 90,000 full-time jobs with above-average pay were created, and most of them are in Montreal. Montreal had a 7% increase in housing prices this year, and that’s high—maybe not in Vancouver, but for Montreal, certainly.”
Before this year, Montreal’s unsold inventory wasn’t critical, but it was high, and this year’s absorption has established what Lavoie calls “reasonable levels.”
The threat of sovereignty is, for the time being, in the rear-view mirror, and the certainty and stability that’s brought have created a feeling of invincibility.
“There’s a lot more confidence in the market and there’s no discussion about political uncertainty, and because Montreal is such a fun and interesting city, there’s been high demand from foreign investors and locals,” said Amy Assaad, a chartered real estate broker with Royal LePage. “There’s nothing hindering the city. Even the interest rate hikes haven’t affected it.”
Assaad added that Montreal is fertile for investors because it’s an affordable metropolis, and with projected yearly appreciation, now’s the time for them to get in and make high returns on their investments.
Unemployment in the province is at an historic low and the tech sector is thriving with more and more companies arriving in the French-Canadian metropolis. Unlike years’ past, Montreal’s educated workforce isn’t leaving, like it traditionally has for Toronto.
“There’s less inventory in the market with 16% less active listings than last year, which means we have more of a demand, and the sales volume of condos increased 18% over last year,” said Assaad. “When there’s less supply and more demand, it’s good for investors to come in. People aren’t jumping to list homes yet because they know prices will go up next year.”
Only New York City’s underground transit system has a higher ridership than Montreal’s in North America, and Quebec university tuition is among, if not, the cheapest on the continent. A slew of new infrastructure projects are rejuvenating the city, as well. A new Champlain Bridge is in the works, and the Caisse de dépôt et placement du Québec proposed an LRT linking Montreal Island with its neighbouring suburbs.
“Land around the light rail project, like on the South Shore, for example, has shot up in value and that’s where people think the big boom will probably be over the next five years,” said Lavoie. “They’re already showing maps of where the stations will be and the land value increased.”
A major increase in foreign demand was catalyzed by the first direct flight from Shanghai, China, to Montreal, and Lavoie said that’s when Chinese buyers started purchasing properties in Montreal’s nicer areas, like Westmount, Town of Mount-Royal, and Laval. However, the domestic factors are more prominent.
“Disposable income in Quebec is growing faster than expenditure, which is not the case in Ontario,” said Lavoie. “In Ontario and B.C. there’s no choice but to adapt because of the squeeze, but in Quebec there’s been an opportunity over the last three years to save money.”
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After years of economic languish, Montreal has entered a new period of prosperity that’s manifesting on the city’s skyline.