28 Apr Are We In A Real Estate Market Shift?
Are We In A Real Estate Market Shift?
Are we in a real estate market shift? I guess that remains to be seen! There are definitely some adjustments that will take place in the wake of the Bank of Canada’s recent sharp and swift interest rate hikes. For the moment, inventory on the Island of Montreal is still low and not meeting the demand of buyers, depending of course, on the type of product and location. If the supply begins to increase, it will definitely put some pressure on prices, creating a more balanced market. It’s still a good time for buyers to lock in their interest rate for 120 days before any further rate hikes. For those that already have their pre-approvals at the pre-hike rate, it’s best to find your property as soon as possible.
All that being said, even if we go into a downward trend, eventually, with time, real estate appreciates. For those with patience, over the long trend of many years and cycles, real estate only goes in one direction and that’s UP.
We recently had an election here in Canada with housing accessibility and affordability becoming a big issue that was addressed by all political parties. One of the solutions proposed was to ban foreign buyers from purchasing in Canada for 2 years. The fact is that foreign buyers make up less than 2% of buyers in Montreal. In fact their investment in the downtown real estate market is essential to the health and well being of this market as there is a large selection of luxury condos to choose from and no shortage of projects and construction here. The true remedy would be to build sustainable, accessible homes and/or townhouses that could accomodate a household of more than 3 people. There’s no shortage of defunct buildings and parts of Montreal that could be repurposed and developed. I also don’t see how these large interest rate hikes are going to help buyers who are already struggling with affordability. Of course I recognize that there’s inflation, but driving the housing market off a cliff will only cause a whole host of fallout.
A Snapshot of the First Quarter of the Montreal Real Estate Market via APCIQ & Centris
Some thoughts and forcasts about the real estate market from around the web:
“Demand is so strong right now – and inventory so low – that the overall effects will be limited. The market will continue to favour sellers.” Higher interest rates might soon push some would-be homebuyers to the sidelines – but don’t expect Montreal’s red-hot housing market to cool down significantly anytime soon.
Montreal home prices surged in March as sales dipped: Quebec real estate board – Montreal | Globalnews.ca
The Quebec Professional Association of Real Estate Brokers says last month’s Montreal home prices crept up by an average 17 per cent from last year as sales fell by almost 10 per cent. The board says the median price of a single-family home reached $565,550 in March, an 18 per cent gain from last year.
Buying a home remains out of reach for many families struggling to break into Canada’s booming housing market as home prices continue to soar alongside inflation and a higher cost of borrowing. Among frustrated prospective buyers is Mac Ross, an assistant professor at Western University’s School of Kinesiology in London, Ont.
The cost of housing continues to soar in 2022, and despite government promises to cool the market, prices are predicted to rise even more. On Tuesday, Royal LePage released their House Price Survey and Forecast, and it predicts that the average price of a Montreal home will continue to creep higher throughout the rest of the year.