Is Buying a Condo in Montreal a Good Idea?
Montreal has a lot to offer homebuyers looking to set down roots. Among the many housing options opening up, condos are gaining popularity for their affordability, convenience, and low maintenance requirements. However, is buying a condo in Montreal a good idea? To answer this question, it’s important to consider the current market, economic outlook, and potential for appreciation over time. Here’s what you need to know.
Current Real Estate Market in Montreal
Recent data from the Canadian Real Estate Association (CREA) shows a 22% rise in home sales transactions above January 2023, which was the largest gain since May 2021. This still represents a below-average growth rate, though, as January 2023 remains the worst start to any fiscal year in decades. Even with conditions as they are, you can still expect a better outlook than in the past couple of years.
Additionally, WOWA reports home sales in Montreal are up by about 28%, with an 18% increase in new property listings compared to the beginning of last year. This means more supply for the demand. While this slow growth is a positive sign for the overall market, condo prices specifically have also increased by almost 4% since last year. However, fixed mortgage rates in Montreal show a reasonable average of 4.69%.
Montreal Economic Outlook
The decision to buy a condo in Montreal can depend on more than the current housing market. If you’re looking for a long-term residence, it’s important to have an idea of the economic outlook. While 2022 saw a significant expansion in the economy, the growth rate is expected to stay around 0.4%. This slower economic growth is likely due to a weaker labor force.
However, the unemployment rate sits below 5% — which is a significant achievement and reflects the potential for job growth. In addition, immigration is expected to increase, which suggests a higher demand for real estate.
Property Appreciation and Rental Demand
WOWA also reports that interest rate forecasts in 2024 suggest declining mortgage rates by mid-year. This is good news for those who want to purchase a condo, as lower rates mean you could find condos for sale at lower prices and grow your investment. For homeowners in the rental market, the potential mortgage rate drop could mean lower costs overall. However, property tax increases have resulted in a higher average price for rentals in Montreal. Still, this increase can mean a higher potential passive income from rental properties.
While the market in Montreal is slower to expand, it’s a steady growth that shows a balance between property prices and the cost of living. In cities like Toronto and Vancouver, the rapid growth suggests there could be a potential real estate bubble in the future.
These factors mean a stable market for Montreal that should continue to experience steady expansion. Rising income averages, further development, and immigration also contribute to consistent growth, making Montreal an ideal location to start the search for your new condo.
Photo by Juan Rojas on Unsplash
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