Empty-nesters might drive up condo sales
Property prices are affected mostly by income and population growth, not to mention interest rates. Family household incomes in Montreal appear to be on-par with the increase in real-estate prices, and interest rates haven’t been this low in 60 years.
Areas surrounding Montreal are expected to have the largest sales increases, for example, Vaudreuil-Soulanges, Saguenay and Gatineau, may benefit from first-time buyers looking for properties on the outskirts of the city. Abitibi and Côte-Nord will benefit more from investment plans and resource mining.
While two-thirds of transactions in Montreal are still single-family homes, condos are expected to outperform all other categories, mostly because of first-time buyers and empty-nesters.
Median price increases for 2012 are expected to be slightly below 2011 because of a greater balance between buyers and sellers. Purchasing power of single households has continued to increase along with a decrease in interest rates. As long as interest rates do not increase substantially in a short period of time, the short-term forecast for prices is positive.
According to Desjardins’ latest issue of Economic Viewpoint, Montréal, Quebec and Gatineau are relatively healthy, because of slower and consistent increases. Some concerns have been raised for Toronto and Vancouver because of the speed in which these markets have grown. An overabundance of condominiums on the market in Toronto raises a concern for prices; while in Vancouver, prices in may be overinflated by foreign investors.
Desjardins’ analysis does not suggest the existence of a housing bubble in Canada and the likelihood of a collapse remains relatively low.
“The national housing market is stabilizing and remains well balanced,” said Gary Morse, CREA’s president. The Desjardins analysis does not suggest a market slowdown, as interest rates are eventually expected to increase.
Overall, buyers have more to chose from in various cities on Montreal Island, save Verdun and Dorval.
Always speak with a local real-estate agent to get the information most pertinent to you.
Daniel Smyth is a real-estate broker with Groupe Sutton-Clodem Inc.
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