In downtown Montreal, there’s a new condo development every where you look. These projects boast of modern facilities, huge rooftop pools and fantastic views of the city. If you check real estate listings in Montreal, you can see a lot of condos for sale or rent. You’d have to wonder – are there way too many condos in the city?
Well the truth is, there are a lot of condos in Montreal. But that is not to say the market is already saturated. If you ask a market analyst, their answer will prove this.
In 2012, there was a change in mortgage rules which saw maximum amortization periods go down to 25 years (previously 30) which slowed down buying. But based on a third quarter real estate data which was released back in September, there’s actually an increase in Montreal condo sales by 8% with selling time remaining at 121 days.
According to Paul Cardinal, Quebec Federation of Real Estate Board’s market-analyst manager, there is now a lot of signs that indicate we’re entering a balanced market.
To be able to answer the question of whether Montreal has an oversupply of condos, you’d need to look at the diversity of housing and population trends. In 2011, it was reported that there are more people living alone than couples with kids. In the Greater Montreal Area, 41% of dwellers live alone. Interestingly, a higher proportion of single-person homes were occupied by seniors.
That’s not all. The baby boomer population is rapidly aging and there’s a stagnant growth rate in the 18 to 64 group plus a drop in birth rate for 6 years now. All these considered, it would appear like there will be an increase in demand for 1-2 bedroom condos in the near future.
In Canada, Quebec has the lowest rate of home ownership based on a 2011 National Household Survey. There are just as many renters as owners in Montreal as well.
About 4.9% of downtown Montreal condos are owned by foreigners which means a big majority are owned by locals. But many of them don’t live in their condo. An estimated 29% of tenants in Montreal rent condo units.
One survey shows that there are more condo developments than non-condo projects in Montreal. Many who buy a condo early in their lives consider it a stepping stone. For them, it’s an ideal first-time investment which they can always upgrade to a bigger property after a few years. That is when they have better-paying jobs and are starting a family. A lot of people believe that they are better off raising kids in a house than a condo.
Quebec Order of Architects’ president Nathalie Dion believes that it’s not really a question of whether the city has too many condos, but instead, if there’s enough housing diversity available for homebuyers.
Experts believe that the outlook for condos is still positive. It’s definitely the affordable option for first-time or young buyers and the numbers show there is an increase in the percentage of people who are living alone or have no children.