By most economists’ estimations, the Canadian housing market is well on its way to stabilizing, after a bumpy start to the year. But not every market is made equal, and some cities are performing better than others.
“Despite the less negative overall picture, the market remains very segmented,” writes BMO economist Benjamin Reitzes, in a recent note. “Sales in Montreal and Ottawa pressed higher after taking a breather in [June].”
Both cities have been seeing record sales in 2018, boosted by strong population growth and more affordable home prices.
“The strength of the [Montréal] market is built on incredibly strong fundamentals,” Quebec Federation of Real Estate Board’s market analysis department manager Peter Rawski told Livabl earlier this month.
Rawski points to Montréal’s employment market as a major factor in the sales boom, after the creation of a record 105,000 jobs in the last two years. Add in a low unemployment rate, increased migration numbers and consumer confidence that sits at a 15-year high, and you have a recipe for a red-hot market.
“Right now we’re forecasting a 5 per cent increase in sales and a 5 per cent increase in the median price of family homes [in 2018],” he says.
Meanwhile, the aggregate home price in Ottawa grew 3.3 per cent to $439,313 last quarter, boosted by its two-storey home market, which saw a 7.4 per cent year-over-year increase to $443,000.
“Really, the increase in prices started in the fall of 2017, when we saw supply start to drop,” Ottawa-based broker Adam Mills told Livabl earlier this month. “We have strong local demand, and people from other pockets of Canada who are realizing that for a major city our property is undervalued.”
Mills predicts that prices will continue to rise in the next quarter, albeit at a slower pace.
“We’re expecting a 2.2 per cent increase,” he says. “I would expect it’s going to continue to pick up in a fairly moderate fashion — not a 6 or 8 per cent growth.”