The Montreal real estate market home stretch

Daniel Smyth

December 2008 marked the end of a record- breaking year in the Montreal real estate market.

Average sale prices of single family dwellings, condominiums, and revenue properties all increased from one to four per cent despite a 6.6 per cent reduction in the number of sale transactions. This reduction signalled the initial effect of this year’s economic downturn.

By the end of the first quarter in March of this year, the average sale price of single family dwellings, condominiums, and revenue properties had fallen as a result of the slump in the economy.

I wrote two articles earlier this year predicting that the real estate market was going to stabilize.

By the end of the second quarter in June, the market began to recover, despite the fact sale transactions were down 1.8 per cent over the previous year. Sale prices increased by 2.3 per cent for single family dwellings, 2.7 per cent for condominiums and 6.1 per cent for revenue properties. An increase in consumer confidence – generated by the government’s economic stimulus package, implemented to reduce interest rates and generate jobs – stimulated the growth in both sale price and number of transactions. Never before had mortgage interest rates been so low. At the end of the third quarter in September, sale prices continued to increase by one to two per cent over the same time last year.

It is likely that 2009 will be another record-breaking year for average sale prices in Montreal. Were it not for the initial sensationalism of the poor economy in the first quarter, 2009 sale transaction numbers would probably finish above those of 2008. Sale times are reducing, however. It now takes about eight fewer days to sell a single-family dwelling and five fewer days for a condominium. There has been no change in sale duration among revenue properties.

Does this indicate that the market is now balanced? It is too early to tell.

Traditionally, there are two peak real estate periods: one beginning in February and the other in September. December, January, July and August are slow real estate months because of the Christmas season and summer holidays.

Currently, there are lots of buyers available and banks are making it easier to qualify for mortgages. If you are thinking of selling or buying, now may be a good time.

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