30 Oct Montreal Real Estate Predictions For 2019

Montreal Real Estate Predictions For 2019

Montreal real estate predictions for 2019 show that we’re increasingly in a digital world, amidst a rapidly changing landscape. Technology has been transforming many industries and real estate will be no exception.

“The intersection of real estate and technology is a major trend in real estate.”

“Fast-paced technological and social change will transform how people live and work, and the real estate sector will face rising pressure to respond with new ideas by accelerating digital transformation, being more innovative with deal strategy and rethinking how it addresses affordability. Those that embrace creativity may find themselves in a position to take advantage of the shifting environment and grow with confidence.”

Proptech, (property technology) trends like blockchain transactions, machine learning, predictive analytics and virtual reality, drones, autonomous vehicles, etc… are helping industry leaders—and emerging real estate start-ups—innovate boldly as they navigate market uncertainty.

Blockchain: “From land title registries to processing rental payments, this new technology has the potential to affect the value chain in real estate. While it’s still early days, real estate blockchain is widely anticipated blockchain will help cut costs and reduce fraud.”

AI (Artificial Intelligence): The power to automate manual, repetitive, mundane tasks like data entry, or help streamline the process of search, will free people from montonous work.

Drones: Can be used to create community docking stations to facilitate last mile delivery needs, or show progress on job site progress for larger scale development projects.

Self Driving Cars: Will redefine how developers think about parking spaces for both residential and retail, as well as urban planning needs and infrastructure.

VR (Virtual or Augmented Reality): Buyers can already view properties through VR head sets without actually having to visit a property. VR property stageing can  provide an interesting alternative to the costly investment in real estate staging such as renting furniture and paintings.

Fintech: New platforms for mortgage lending or the use of tokens in real estate transactions.

“Real estate companies that move too cautiously on implementing new technologies may find themselves at a disadvantage when it comes to competing for the best new talent with the diversity of skills and expertise needed to take full advantage of the benefits of proptech”

*Table via PWC Emerging Trends in Real Estate

Markets To Watch in 2019

Ten markets to watch across Canada:

After many years of suppressed demand, the Quebec market is now a popular target for investors and developers. “Montreal’s economic growth is forecasted to reach 2.2% in 2018 and 1.9% in 2019 after posting a 17-year high in 2017 of 3.7%, according to the CBoC. New construction continues to change the dynamic of Montreal’s central business districts and skyline.” Residential construction has remained healthy in 2018 and will continue this trend into 2019.  Builder’s are trying to keep up with a strong buyer demand and prices are still affordable compared to other Canadian markets like Toronto and Vancouver.

Property Category Outlook

Single Family Homes: Supply is tight, inventories low, prices are higher do to the economics of supply and demand.  It’s a seller’s market and overall affordability in this sector is a concern.

Condominiums: Highest performing category in the Montreal CMA. Sales and prices have increased year over year. Although there are a considerable amount of new developments and units to continually enter the market, demand is strong and the price point more attainable than single family homes. As long as the economic expansion continues in Montreal, the outlook for 2019 should continue to thrive. It’s a seller’s market, of course depending on the location of the condo.

Investment Properties:  Low rental inventories and high demand due to higher interest rates and tougher mortgage rules are sending rent yields increasingly higher. This has not gone unnoticed on developers and investors who are increasing looking for profitable investment vehicles.  Opportunities are still out there but face much competition from strong buyer demand.

Overall: Higher interest rates and tougher mortgage rules will effect affordability and lifestyle choices.

Housing Price Change Year Over Year

Information source: PWC Emerging Market Trends 2019