Since March 2020, when the World Health Organization announced the global pandemic, Montreal’s residential market has also been hit hard by closures and new social distancing rules. Even if real estate changes seem to be stabilizing, how will this affect your next property sale or purchase?
Here’s some information you might hear about:
1. Real estate prices continue to rise
The math is pretty easy: when consumers are looking for a product that’s becoming scarcer on the market, prices go up. Simple, isn’t it?
Following the lifting of real estate restrictions in May, sales rose dramatically in June. “First-time buyers are boosting demand more than others, because they’re not putting their old property up for sale in the process, which further restricts supply,” explains Katia Samson.
On the flip side, home prices also increased, rising 8.7% from March to June 2020, to a median price of $566,874 for a two-storey home. Clearly, we’re in a seller’s market. “I’ve been a real estate broker for 25 years and I’ve never seen such a short time between a property coming on the market and it being sold.”
The supply of properties is also lower due to the pause in construction in March and April.
According to the experts, prices will ease a little after the post-confinement craze for property purchases, but long-term price increases will probably be unavoidable. If you want to sell, take note! Overall, prices are expected to rise by around 3.5% by the end of 2020 compared with last year.
2. And condos?
In the first quarter of 2020, the condominium market was the most dynamic for sellers in the entire Montreal metropolitan area, with fewer than four sellers per buyer. A market is considered balanced (favoring neither sellers nor buyers) when there are between eight and ten sellers per buyer.
According to statistics, the number of condominiums for sale by individuals (not new construction) surged to 1,707 listings in June, an 83% increase in one month. Most of these listings are for modest-sized apartments, mainly located in downtown Montreal and Griffintown.
According to Katia Samson, “yes, the market is evolving when it comes to condo resales in Montreal, but if you’re a seller and your property is in perfect condition, this shouldn’t worry you as prices continue to rise. If you’re hesitating to put your condo up for sale right now, Groupe Immobilier Katia Samson is here to answer all your questions and help you get the best result for the sale of your property!”
3. Changes to mortgage loan insurance
The Canada Mortgage and Housing Corporation (CMHC) offers insurance to protect lenders in the event of default by homeowners. If a buyer has a down payment of less than 20% of the purchase price, mortgage loan insurance is required and must be purchased by new homeowners.
On July 1, the organization introduced changes to the mortgage insurance eligibility rules. Under the new regulations, the amount of debt for an insured mortgage will be lower than before, the lender’s credit score will have to be higher, and the new homeowner will have to use his or her own money – not another loan – for the down payment.
“If you’re not sure how these new rules might affect you, we can put you in touch with a mortgage broker to find out your purchasing power,” advises Katia. “If you want to sell your property or buy a new one, don’t let the COVID pandemic slow down your life plans. We’re all evolving through these new realities.”