MONTREAL, QUEBEC--(Marketwired - Dec. 5, 2013) - Montreal's housing market has improved in the past year, according to a new report on Canada's major housing markets from BMO Economics.
The report, titled "Canadian Housing Update: Tale of Four Cities", examines the state of the housing markets in Canada's four largest cities: Vancouver, Calgary, Toronto and Montreal.
"While sales in Montreal are still 9 per cent below past decade norms, they have risen 2 per cent in the past year," said Sal Guatieri, Senior Economist, BMO Capital Markets. "Support from decent affordability and job growth has countered lower population gains. An upswing in new listings has kept buyers in the driver's seat, unlike in the other major cities. This is especially true for the new condo market, where a moderate overhang of unsold units persists."
Despite appreciating 155 per cent since 2001, affordability remains healthy for Montrealers. "Benchmark prices run at four-times family income, and mortgage service costs consume a reasonable 23 per cent of earnings - less than half that of Vancouver," noted Mr. Guatieri. "First-time buyers in Toronto and Vancouver can only cry over the cost of a two-story detached home in Montreal: $382,000 versus $565,000 in the Greater Toronto area and $1,030,000 in the Greater Vancouver area. Montreal should remain affordable even when rates normalize."
Mr. Guatieri stated that Montreal's house prices are expected to hold steady in 2014. "With fewer detached homes built, condo construction flourished in recent years, leaving the city with a moderate overhang of vacant units - more than in Toronto. While condo sales have picked up recently, they remain soft, as investors are wary of a higher condo rental vacancy rate."
According to François Hudon, Senior Vice President, BMO Bank of Montreal and Co-Head Specialized Sales North America, prospective buyers should take advantage of current market conditions in Greater Montreal and prevailing low interest rates.
"BMO experts, including mortgage specialists, can accompany first-time homebuyers, as well as all customers, through the purchasing and financing process, and we invite potential buyers to meet with us and pre-qualify for a mortgage suited to their personal financial situation," said Mr. Hudon.
BMO Housing Market Scorecard for Four Major Cities and Canada
|Existing Sales (y/y % change)
|Sales vs. 10-year Mean (% change from average)
|Prices (y/y % change)
|Prices vs. Family Income (ratio of annual family income)
|Mortgage Service Costs (% of family income)
|Median Family Income
The full report featuring the complete and sourced version of the scorecard above, can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $537 billion as at October 31, 2013, and more than 45,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.