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While the rest of Canada’s urban housing markets were deflating under the pressure of the mortgage stress test and portents of potentially higher interest rates, Montreal was one of two cities to report price growth in 2019. (The other city was Halifax.)
In fact, Montreal is the only city to consistently report positive price growth over the last six months, according to data from the Teranet-National Bank House Price Index. And it looks as if that growth is going to continue, at least for the foreseeable future.
“Canadian housing activity appears to be broadly stabilizing, as there are signs that the market has largely digested the many policy changes,” explained Bank of Montreal chief economist Doug Porter in his May 2019 report. Combine this with the ongoing evidence of slowed economic growth and the resulting halt in near-term interest rate hikes, and it appears Montreal may lead the country when it comes to property price growth.
While this is great news for sellers and those already in the housing market, this trend could throw up potential hurdles for first-time buyers. Here are the results for Montreal of this year’s Where to Buy Real Estate report.
In 2015, the average price of a home in Blainville was $335,000; in Ahuntsic, it was $450,000. At first glance, these statistics give the impression that Montreal real estate is expensive. But the statistics don’t take into account the additional costs associated with commuting into the city from the suburbs. Many suburban families end up needing a second or even a third vehicle once their teenagers start driving.
Pierre-Olivier Pineau, professor at HEC Montreal business school, calculated the total cost of operating a vehicle at $10,500 a year in a 2014 study—enough to carry $160,000 worth of additional mortgage. This means that owning a home in the city is effectively no more expensive than owning a home in the suburbs—to say nothing of the time saved commuting.
There are a few ways to make buying in Montreal more accessible than ever before.
Choosing inexpensive neighbourhoods
Growing numbers of buyers are attracted to the lower prices of properties in lesser-known parts of the city, such as Ville-Émard, Côte-Saint-Paul and Hochelaga-Maisonneuve. All three areas are increasingly popular, in part because they offer a variety of homes priced well below those elsewhere in Montreal.