|Montreal is emerging as one of Canada’s hottest markets for luxury real estate, according to two recent reports on the country’s top-tier property markets. Sales of multimillion-dollar homes are soaring — and more million-dollar condos are being sold than ever before. |
For the first time, sales of these ultra-luxe condos topped 20 per cent of real estate sales valued over $1 million in Montreal, according to Sotheby’s International Realty Canada’s Top-Tier 2019 year-end report — a 39-per-cent increase in sales compared with the previous year.
Most Montreal luxury condo sales in 2019 were within the $1-million to $3-million range, and two units above $4 million sold in 2019 (only one unit sold at that price point in 2018).
According to Don Kottick, president and CEO of Sotheby’s International Realty Canada, low-maintenance condo living is often attractive to wealthy world travellers, whether they are based in Montreal or in search of a pied-à-terre.
“Montreal has truly become a global city. And when you have global cities, obviously, real estate tends to increase and, therefore, if you can’t build out, you build up,” Kottick said.
Sotheby’s credits strong economic fundamentals and the lack of foreign buyer taxes for the increase in luxury property sales. It also noted that Quebec experienced its largest population increase in three decades in 2018 and 2019.
A second report on the same theme produced by Engel & Völkers noted that the hottest Montreal luxury property markets in 2019 were the Plateau Mont Royal, Outremont and the Gay Village. The report singled out Mile-Ex and Mile End as emerging hot spots for million-dollar-plus property.
Little Italy and Villeray were also mentioned as areas with strong investment potential, and farther afield, the South Shore, North Shore, Eastern Townships, Tremblant and Quebec City are also becoming known as healthy markets for luxury property, the report noted.
In the past year, Montreal home prices rose faster than they have in almost a decade, and Engel & Völkers anticipates annual price growth of four to seven per cent in 2020 in both the Montreal and Mont-Tremblant markets.
In Montreal, the number of detached homes valued over $4 million sold increased 60 per cent, from 10 in 2018 to 16 in 2019, the Sotheby’s report noted. Interestingly, the number of sales of detached single family homes over $1 million decreased by three per cent in 2019 compared with 2018 to 423 homes sold. Yet Kottick said the lack of sales doesn’t reflect a lack of interest.
“Really, this is just a lack of inventory. If there were more homes available, I think you would see even more sales,” he said. “There’s definitely a shortage in the $1 (million)-$2 million range. Detached homes are just not coming on the market, and that’s obviously creating a bottleneck.”
Most Montreal luxury condo sales in 2019 were within the $1 million to $3 million range. SOTHEBY’S INTERNATIONAL REALTY CANADA / MONTREAL GAZETTE
In certain markets, however, there may be other factors at play.
According to West Island Royal LePage broker Sean Broady, the number of properties that were removed from the market or didn’t sell in areas like Beaconsfield has increased in recent years.
Of the West Island municipalities, Beaconsfield typically has the most sales above $1.5 million, Broady said. Since 2017, the number of sales above $1.5 million has held steady at about 10 per year. In 2017, there were seven expired or cancelled listings. In 2018, there were 21, and in 2019, 31.
There may be many reasons why those homes didn’t sell. The homeowners could have changed their minds, for example. But Broady suspects a simpler answer:
“It’s not selling because it’s purely speculative pricing. You’ve got these homes that are at $1.5 (million) to $2.5 million, and you’re just seeing some crazy asking prices. I think some of the brokers are as much to blame as the owners of these properties,” Broady said. “The savvy buyers who are in that price range aren’t just going to pay whatever. They’re doing their homework, they know what these homes are worth.”
The homes in this price range that did sell, Broady noted, sold much more quickly than in 2017, averaging 60 days on the market instead of 153 days.
“Those who are pricing their homes correctly are meeting that same number of buyers that have that budget, and they’re selling them quicker,” he said.