07 Jan On Kindness And The Real Estate Outlook in 2022
On Kindness And The Real Estate Outlook in 2022
On kindness. I honestly find it hard to believe that we’re already in January of a new year. 2021 felt like it lasted 6 months rather than 12, or maybe that’s because so much of our time in the first half of the year was spent in curfew, lockdown and the zoom form of human contact. The one silver lining in my case, is my husband and I got to spend more quality face time with 2 of our kids who spent more time at home.
Gary Vaynerchuk has been recently espousing the value of kindness in business and I couldn’t agree more. Changes in values, mindsets and ways of doing or being in the world can take time to evolve. Both my parents’ and grandparent’s generations lived through the horrors of war. My father and his family were in the Siberian Labor Camps and therefore the lucky ones who didn’t end up at Auschwitz.
Through sponsorship by a distant relative and with the help of JIAS, my father and his family eventually made it to Canada as penniless refugees. It would be understandable to have a hardened view of the world after surviving the kind of hardships my father and his family endured. Like many of his generation, there was a fear that nice people finish last or kindness meant weakness. My father, despite his rough manner, was at heart, a kind and empathetic person.
The world has changed so much but human evolution is a much slower process then the pace of technological innovation. The wisdom keepers like Ghandi, Buddha, etc, who were just some of the enlightened souls, taught us by lead example of how to infuse leadership with kindness and compassion.
One can still be business savvy, smart, and focused, all while being kind, empathetic and patient with others. You never know what someone is going through in their lives…so #bekind!
Now on the Montreal Real Estate Front:
2021 In Review
These are the highlights of note according to Centris
- “The single-family property category has been under siege, having recorded unsustainable price increases across several sectors, including in the Greater Montreal area.
- Prices soared, resulting essentially from a historically high level of overbidding, fuelled by low financing rates.
- This situation has caused overvaluation in certain Quebec markets, mainly in the southern part of the province.
- Affordability challenges have become critical in the Montreal area, especially for young households.
- That said, affordability levels remain satisfactory in several CMAs and agglomerations, for example as concerns Montreal-based households and teleworkers.
- Widespread integration of the teleworking model into service-sector operations is an increasingly common trend. However, a shift in the balance back toward office presence is expected, considering the real costs associated with a return to a more hybrid model requiring more in-person work.
- Although we are in more of a price catch-up context in many markets—such as the Trois-Rivières census metropolitan area (CMA) and, to a lesser extent, the Quebec City CMA—speculation has taken a stronger hold in certain markets in the Montreal CMA, on the outskirts of Montreal and in many resort markets.
- The “cottage” subcategory is increasingly turning into a revenue property segment. Prices of secondary homes have exploded.
- The share of higher price ranges in overall sales is expanding rapidly.
- Condominiums are now clearly the key category for access to homeownership, across Quebec.
- Unless they consider leaving the city, young households, especially those with no access to financial support from family members, are increasingly having to resort to condominiums and give up on plans to buy a single-family home in the Montreal CMA. The least affluent and least mobile among them are giving in and staying in the rental market, with a concomitant reduction in resale market transactions.
- Against this backdrop of overall price increases, plexes have become an attractive property category because of their versatility (e.g., they can be converted into intergenerational homes) and the fact that they can tap the potential of rent increases across the province.
- Another reason for the higher number of investors on the market is the growing tendency to convert properties, especially single-family homes, into rental housing.”
The outlook for Montreal in 2022 according to Centris:
“The Bank of Canada has indeed announced, earlier than expected, that interest rates will rise in 2022 so as to curb the strong inflationary pressures created by the economic recovery, increased consumption, the labour shortage, higher fuel costs, and the many supply-chain issues stemming from the health crisis. This stance by the central bank has already produced significant anticipatory upward movement in the bond market, which is already reflected in a rise in five-year fixed mortgage rates. Those increases will have a reverse effect on price movements in the various sectors as well as on the higher-price segments that have been the most affected by overbidding, overpricing and speculation.
“The interest rate hike, however, will come in time to help stop a bubble from forming in the Greater Montreal region,” Mr. Brant adds. “The market conditions, which will continue to strongly favour sellers, will readily absorb the potential return of properties to the market, maintaining the sellers’ advantage and keeping prices from falling. Instead, we will see a stabilization, or even a correction, in several segments, particularly in the higher price ranges.”
That said, the average Quebec household that renews a mortgage taken out five years ago in 2022 will see very little impact on its budget, meaning that putting a property on the market will be a risk only for those whose employment and income status has changed significantly. “We mustn’t forget that the criteria for pre-qualifying households for a mortgage (also known as the stress test) protect against the scenario of a massive return of properties to the market, especially in a context where mortgage loan quality has improved in 2021,” Mr. Brant cautions.”
“Montreal, should feel the benefits of a resumption in migration flows, in part thanks to immigration and to inflows of residents and non-permanent workers given the labour shortage context. With the government having increased immigration quotas, the Montreal market could well remain under pressure despite the inevitable—and welcome—price corrections over the short term, particularly in the single-family category and in the upper price ranges. Generally speaking, Canada, and Quebec in particular, with its economic vitality and financial stability, should continue to attract large numbers of immigrants as growing geopolitical, economic and climate uncertainties make them preferred choices as a host country and more specifically a host province. Quebec is currently the economic engine of the country, owing to massive infrastructure investments and a diversified economic structure that emphasizes forward-looking, high-value-added industry segments—all of which extends to the regions and is being achieved in an especially stable, well-controlled political climate.”
Access the full reports:
December 2021 highlights
- With only a 2 per cent drop in year-to-date sales, the Montreal CMA real estate market was particularly active in 2021. It should also be noted that this activity is compared with 2020, an historical year in terms of sales and despite the lowest number of listings ever recorded in the region.
- More specifically, despite a 19 per cent drop in sales in December, it nevertheless ranks second for the most active December on record, reaching 3,675 sales.
- The smallest drop was recorded in Vaudreuil-Soulanges (-7 per cent) while the Island of Montreal
(-14 per cent), the South Shore and Saint-Jean-sur-Richelieu (-18 per cent) experienced more significant declines. The strongest decreases were observed on the North Shore (-26 per cent) and Laval (-27 per cent).
- Single-family homes and income properties saw the largest drop in sales, respectively -26 per cent and -18 per cent, followed by condominiums (-10 per cent).
- Active listings of condominiums (-29 per cent) and single-family homes (-26 per cent) continued to register sharp declines for this period, contrasting with plexes (-6 per cent).
- With market conditions still very strongly to the advantage of sellers, median prices continue to experience significant increases compared to the same period last year for single-family homes (+22 per cent). They remain at high levels for condominiums (+17 per cent) and small income properties (+14 per cent).
Read the full report:
Unless stymied once again by pandemic restrictions, immigration is expected to be a major driver of increased demand for housing. The aggregate price of a home in the Greater Montreal area in the fourth quarter of 2022 is expected to increase eight per cent year-over-year to $564,800, according to the Royal LePage Home Price Forecast for 2022.
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